Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

SWANSEA CITY COUNCIL (TAWE BARRAGE) BILL [Lords]

Read the Third time and passed, with amendments

STANDING ORDERS (PRIVATE BUSINESS)

Ordered,
That the Amendments to, and repeals of, Standing Orders set out in the List of Amendments to the Standing Orders relating to Private Business proposed to the House by the Chairman of Ways and Means, laid upon the Table by Mr. Speaker on 24th March, be made.—[The Chairman of Ways and Means]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Fontainebleau Agreement

Mrs. Clywd: asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the implementation of the Fontainebleau agreement; and if he will make a statement.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): Following the agreement on control of Community spending reached at Fontainebleau last year, agricultural prices were reduced by 3·5 per cent. in real terms. The new own resources decision, which provides for abatement of the United Kingdom's budget contribution, has come into force. Our 1984 VAT abatement of £605 million has been paid and the abatements being made to our monthly VAT contributions in respect of 1985 will be worth at least £830 million. These figures demonstrate the value of the Fontainebleau agreement to Britain. As I have frequently made clear, reform, especially of the CAP, must be pursued year by year, which is exactly what we are doing.

Mrs. Clwyd: Is it true that the EEC budget crisis is back with a vengeance, that it never went away and that it will be impossible to fund regional and social programmes already in the pipeline, which especially benefit the United Kingdom, without a further increase over and above the 1·4 per cent. increased VAT ceiling in the current year?

Sir Geoffrey Howe: The hon. Lady should not jump to that latter conclusion. The EEC, as with almost all other organisations, must control its spending and revenue. The battle to secure budget discipline is a battle without end which will be sustained.

Sir Anthony Meyer: Is it not clear that there will be mounting difficulties in the EEC and that it is, therefore, of the utmost importance to take effective decisions to safeguard the Community and the interests of Britain? Is not the Single European Act, modest though it is, an essential first step in that direction, and should it not be fully supported?

Sir Geoffrey Howe: My hon. Friend has put his finger precisely on the merits of the Single European Act from his point of view. The House will have the opportunity to debate it more fully in due course.

Mr. Marlow: Will my right hon. and learned Friend confirm that whatever reforms there have been in the CAP, the problems of the CAP have accelerated to a greater extent than have the reforms? Will he also confirm that he, like many of us, predicted last year that there would be a massive increase in cereal surpluses and also that there was a strong possibility that the dollar might decline and, therefore, that there is no justification whatever for the Community seeking more money for that purpose?

Sir Geoffrey Howe: Plainly it is desirable that the Community should seek to live within the money that has been allotted to it under the existing own resources provision. The change in the dollar-ecu rate is bound to create problems, as was forecast, but that fact must be put in the wider context. The difficulties facing agriculture are not confined to the European Community. Throughout the world agriculture is facing a near crisis of overproduction, caused to a large extent by improvements in technology. The Community is not alone in having surpluses. The world cereal stock is estimated to exceed 190 million tonnes, of which almost half comes from the United States.

Mr. George Robertson: Is the Secretary of State aware that when the Fontainebleau agreement was brought back to the House its foundation was budget discipline? The Foreign Secretary now tells us that budget discipline is a battle without end. As the battle is being lost everywhere that it is being fought, and as the financial resources of the Community will run out probably when the Secretary of State takes over the chairmanship of the Council of Ministers, how long will the Fontainebleau basic agreement last? As our rebate is tied directly to the 1·4 per cent. VAT ceiling of the EEC, for how long will the rebate continue in existence while CAP surpluses continue to wreak havoc on the Community's budget?

Sir Geoffrey Howe: The hon. Gentleman has made three points. First, it is important to control expenditure and to sustain budget discipline. It is always heartwarming to have support for that proposition from the Opposition.
Secondly, the hon. Gentleman says that it is important to achieve and to sustain continuing reform of the CAP. It is heart-warming, too, to hear that proposition advanced by the Opposition.
Thirdly, it is desirable that the Fontainebleau agreement should remain in existence for as long as possible to sustain the extremely beneficial arrangements for the United Kingdom. I endorse all three propositions.

Chilean Soldiers (Training)

Mr. Flannery: asked the Secretary of State for Foreign and Commonwealth Affairs if any soldiers or


officers of the Chilean Government are presently being trained in the United Kingdom; and if he will make a statement.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): We do provide some training for Chilean armed forces personnel in the United Kingdom, but do not allocate places to Chileans on courses covering internal security techniques.

Mr. Flannery: Is not this provision of training utterly disgraceful? The Minister's reply is rather like that of the second housemaid who said that her baby was only a little one. The reality is that a principle is involved. That brute beast Pinochet is in charge of Chile and the people of Chile are steadily going for his throat to get rid of him. Are we not to change a policy that has applauded his master's voice in Washington with Marcos, Duvalier, Samosa and company? Why do we not denounce Pinochet democratically in our own right, remove anything to do with him from Britain and support the people of Chile in their drive towards democracy?

Mr. Eggar: It is sad that the hon. Gentleman has such a partial view of affairs. We have continued to make clear our concern about the Chilean Government's human rights record. We supported both the resolution of 14 March of the United Nations Commission on Human Rights, which criticised Chile's record, and the European Community's presidency statement of 18 March, which expressed concern about restrictions on freedom in Chile.

Sir Frederic Bennett: If we are to have any sort of objective appraisal of these matters, should the House not recall that at the time of the Falklands conflict we were by no means unhappy to receive indirect assistance from the Chileans? I wonder whether my hon. Friend could put in the Library a list of the other countries, about which no complaint seems to be made, which send members of their armed forces to be trained in Britain, including Libya?

Mr. Eggar: I have taken careful note of what my right hon. Friend has said. I must tell him that details of bilateral military training involving all countries are kept confidential.

Mr. Winnick: Does the Minister realise how deplorable it is to have such close collaboration with a bloodstained dictatorship, such as the Chilean junta? Is it not the height of hypocrisy for Tory Members to denounce repression in eastern Europe while being only too pleased to have this form of collaboration with the regime in Chile?

Mr. Eggar: We have always made it clear that we condemn abuses of human rights wherever they may occur.

Mr. Dalyell: How do the Government know whether or not their help will be used to develop internal techniques? What do the Chilean forces have to do other than concentrate on internal affairs? That is what they are about.

Mr. Eggar: As I have already made clear to the House, we have made it our policy not to allocate places for military training within the United Kingdom on courses which cover internal security techniques.

Mr. Hill: Does my hon. Friend agree that only countries with which we enjoy friendly relations should

receive training facilities in Britain? Some of the countries which have asked for military training here for their forces are anti-European or anti-United Kingdom.

Mr. Eggar: We take a number of factors into consideration when military training is requested by Third-world countries. As I said to my right hon. Friend the Member for Torbay (Sir F. Bennett), the details of those countries which send officers to this country for training are confidential.

Mr. Foulkes: Do the Government not recognise from experience in Haiti and the Philippines that external pressure is important in dealing with dictators? Do the Government not also recognise that by supporting the dictator Pinochet and training his troops they are undermining the democratic forces of the Right as well as of the Left in Chile? In view of the strong views expressed in the House today, will the Government rethink this policy immediately?

Mr. Eggar: Our policy is absolutely clear. We have made clear our concern about the position on human rights in Chile by our support for the United Nations High Commission for Refugees' announcement and for the EC presidency. There can be no doubt about our views on human rights in Chile.

Mr. Flannery: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of those replies, which mean that we are supporting a brutal dictatorship, I reserve the right to raise this matter on the Adjournment.

Syrian Jews

Mr. Merlyn Rees: asked the Secretary of State for Foreign and Commonwealth Affairs what assurances he sought during recent discussions with the Syrian Foreign Minister that those Syrian Jews seeking to emigrate would now be allowed to do so; and if he will make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. Tim Renton): The local Jewish community has made it clear in the past that it does not wish its conditions to form part of Western ministerial exchanges with the Syrian Government. We have nevertheless left the Syrian Foreign Minister in no doubt of the strong feelings in this country on the question of human rights in Syria.

Mr. Rees: Can the Minister of State help, perhaps by getting a parliamentary delegation to go and see the conditions in which about 4,500 Jews are living in Syria? Given the nature of the middle east, the conditions cannot be good, but the more information we have the better, because we must do something to get these people out of Syria.

Mr. Renton: I listened carefully to what the right hon. Gentleman said. I am not certain that a parliamentary delegation would necessarily be the right avenue. However, he should discuss it, if he has not already done so, with Amnesty International. I understand the concern that he expresses. When I was in Damascus in December I raised the issue of a local Jewish community informally with a Jewish business man there. I was told that the only condition with which they are having real difficulty at the moment is the inability to travel outside Syria. Other than that, in many ways their conditions are much the same as those of other Syrian citizens.

Mr. Walters: In the course of his talks, did my right hon. and learned Friend the Foreign Secretary also assure the Syrian Foreign Minister that Her Majesty's Government fully appreciated Syrian feeling about the future of the 100,000 Syrian civilians thrown out of Golan by the Israelis in 1967—

Mr. Speaker: Order. The question concerns Syrian Jews.

Mr. Walters: —and that feelings about humanitarian problems were not restricted to one section only?

Mr. Renton: Neither my right hon. and learned Friend nor I raised the question of the Syrians who have been dispossessed as a result of the Israeli occupation of the Golan Heights. However, I accept what my hon. Friend has said. Syria is a party to the conflict between the Arabs and Israel. Syrian territory, the Golan, is occupied by Israel. We very much wish to see Syria play a constructive and helpful part in any peace settlement.

Mr. Speaker: I draw the attention of the House to the fact that this question concerns Syrian Jews.

Mr. Faulds: May I confirm what the hon. Gentleman has just said? On a previous visit to Syria I was told by a spokesman for the Jewish community that their lot was the much easier the less intervention and propaganda were made about their position.

Mr. Renton: I thank the hon. Gentleman for what he has said. It is always pleasant to have one's remarks fully corroborated, from whatever source in the House.

Mr. Cyril D. Townsend: What assurance has my hon. Friend had from the Israeli authorities that Syrian Jews emigrating to Israel will not end up dispossessing and disfranchising Palestinians on the West Bank and in Gaza?

Mr. Renton: The number of Syrian Jews emigrating to Israel at present is limited. We have an idea that a small number have had permission to leave. I understand my hon. Friend's point, but the numbers involved could only be very small.

Mr. Marlow: On a point of order, Mr. Speaker. I am sure that you are aware—

Mr. Speaker: Order.

Mr. Marlow: rose—

Mr. Speaker: Order. I did not call the hon. Gentleman.

Iran-Iraq War

Dr. M. S. Miller: asked the Secretary of State for Foreign and Commonwealth Affairs what preparations he is making for a new initiative to resolve the Iran-Iraq war in the context of the forthcoming British presidency of the European Economic Community.

Sir Geoffrey Howe: The Iran-Iraq conflict is a prominent item on the agenda of European Community Foreign Ministers. With the other member states, we shall continue to press for the early implementation of Security Council resolution 582, and to support the mediation efforts of the United Nations Secretary-General.

Dr. Miller: I thank the right hon. and learned Gentleman for his reply, but will he go a little further than

that? When he assumes the presidency of the Economic Community, will he take a very early opportunity to impress upon his counterparts the necessity to desist from supplying all weapons of war to that area, and also to make some sort of representation to the Soviet Union to do the same?

Sir Geoffrey Howe: I assure the hon. Gentleman that we have been and will continue to be active in the Security Council itself and in the European Community in support of pressing for the acceptance of Security Council resolution 582. As the hon. Gentleman knows, our policy is not to sell defence-related equipment that could significantly enhance the capability of either side to prolong or exacerbate the conflict. That shows our own judgment on the merits of that policy.

Mr. David Howell: Does my right hon. and learned Friend agree that the current collapse in oil prices could have a radical effect on the outcome and progress of the Iran-Iraq war? Is that not just one of the foreign policy consequences in the Gulf, following the collapse in oil prices? Is not now the time to pursue talks, for instance with the Saudis and other interested parties in the area, on the lines that I think my right hon. and learned Friend himself suggested in Riyadh a few months ago?

Sir Geoffrey Howe: It is possible that the change in the state of the oil market will change conditions in a fashion that will create another possible opening for activity of the sort that my right hon. Friend has in mind. I shall certainly bear his suggestion in mind. As he will recall, my hon. Friend the Minister of State recently visited the Gulf to discuss the issue with a number of Gulf states, as I had done previously with Saudi Arabia. We shall continue to press the case in that way.

Mr. Alton: Given the complaint only last week by the Saudi Arabian Foreign Minister that the continued provision of aquatic craft and bridge-building kits, for instance, in the Iraq-Iran conflict is prolonging the war, how does the right hon. and learned Gentleman distinguish between what he referred to as lethal and non-lethal weapons on a previous occasion?

Sir Geoffrey Howe: We distinguish in that way by making sure that every application for the export of defence-related equipment is rigorously scrutinised to ensure that all items are excluded that could contribute in the way that I have described to prolonging or exacerbating the conflict.

Mr. Latham: Is it not clear beyond any doubt that gas and chemical weapons have been used in this terrible war? Who is supplying them? What is Britain, as part of the United Nations, doing to try to stop it?

Sir Geoffrey Howe: There is no doubt, from a presidential statement at the United Nations Security Council on 20 March, that there is firm evidence that Iraq has used chemical weapons. We condemn the use of chemical weapons, wherever and whenever it occurs. We have taken action jointly with our Community partners—now more than 12 months ago—to ensure that we do not export materials that could be used for that purpose. However, I entirely agree with my hon. Friend about the importance of doing everything that we possibly can to stop the use of these appalling weapons in this or any other conflict.

Economic Summit

Mr. Blair: asked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has held in the European Community Foreign Affairs Council concerning the forthcoming world economic summit.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): The Tokyo economic summit has not been on the agenda of this year's Foreign Affairs Council meetings. But world economic issues are regularly discussed at international meetings such as those of the FAC. They include developments in the world economy such as oil prices and debt problems and also trade issues, which are likely to be discussed at the Tokyo summit.

Mr. Blair: Does the Minister agree that one of the main items on the agenda should be international debt? Does she further agree that falling oil prices for oil-exporting countries, just as falling commodity prices for African countries, have intensified their debt problem in a way that is not offset by the increase in world growth? Will the hon. Lady therefore give an undertaking that the Government will support moves, first, to put life into the ailing Baker plan for international debt, and, secondly, to give the type of increase in funding to the World Bank that matches resources to the scale of the problem?

Mrs. Chalker: I understand the hon. Gentleman's concern. There are no formal agendas for summit meetings, as they are matters for Heads of State and Governments. Questions of policy are addressed by my right hon. Friend the Prime Minister. I shall bring the hon. Gentleman's remarks to the notice of the Prime Minister. The fall in oil prices causes concern in all parts of the world. I cannot imagine that any discussion of this nature could possibly take place without the references that the hon. Gentleman mentioned.

Mr. Budgen: Does my hon. Friend agree that there is something to be said for telling the EEC that this country does not believe in a lot of pretentious posturing over foreign affairs? In particular, this country does not believe that there is any such thing as EEC foreign policy. It would be better if the EEC concentrated on getting its own finances in order. Does my hon. Friend accept that that might be achieved by telling the EEC that there will be no increase to 1·6 per cent. in our VAT contribution?

Mrs. Chalker: I hope my hon. Friend meant 1·4 per cent. It is important that there should not be posturing. We need to discuss issues with our colleagues in the EEC, and what we want in summit meetings is a free flow of discussion. That is the value of discussion. If there were the posturing that my hon. Friend spoke about, that would destroy the value of discussion.

Mr. Deakins: During our presidency of the EEC in the next six months, will the Minister consider the possibility of inviting observers from the poor states of the world, from UNCTAD and from the United Nations to attend the Tokyo economic summit? At present it is a grouping of rich nations trying to settle the world's economic affairs in their own interests.

Mrs. Chalker: The hon. Gentleman should be under no illusions. The countries which are represented at summit meetings are well aware of the extreme needs of some of the poorer nations. What comes up on the agenda

is a matter for my right hon. Friend the Prime Minister, but I shall make sure that the hon. Gentleman's remarks are brought to her attention.

Mr. Rathbone: If that subject is not on the Council's agenda, can my hon. Friend say whether the control of the threat of drugs is on the agenda? If so, the European Community could support my right hon. and learned Friend the Foreign Secretary's efforts, which he made during his visits to India and to Pakistan to increase our influence in those countries, to minimise that threat.

Mrs. Chalker: I can well understand my hon. Friend's concern about this matter. There are regular discussions between the Interior and Home Ministers. I am sure that the control and the threat of drugs is a matter for all nations.
I cannot give my hon. Friend a definite clue whether it will be discussed at the meeting or whether it will be part of the formal agenda. I can only say that because the control of drug taking and drug peddling in Britain remains a special concern of my right hon. Friend the Prime Minister, I am sure that it will be discussed at some stage.

Latin America (Debt Repayment)

Mr. Eastham: asked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has held with Latin American Governments concerning their repayment of debts; and if he will make a statement.

Mrs. Chalker: The heavy debt burden borne by many Latin American Governments continues to cause us concern; this problem is frequently discussed in the course of our contacts with their Governments.

Mr. Eastham: In view of the serious outflow of funding for poor Latin American countries and as that is being compounded by the loss of revenues from oil, would it not be a good thing if the Government took some intitiative, perhaps with their EEC partners, to organise a conference at which sane policies could be introduced regarding pledges on capping interest rates to allow those countries to get over this most difficult period?

Mrs. Chalker: There is no doubt that the question of reducing the pressures on Latin American countries is taken up not only by the IMF, but by the World Bank. I believe that the Baker initiative, which is being applied to middle income debtors and, indeed, to those who have greater problems—the poorer debtors of whom the hon. Gentleman spoke—will allow those donors to look at the needs of those countries.
The effect of the oil price on those debtor countries varies, because it depends on whether they are importers or exporters. The matter needs to be looked at on a case-by-case basis. That is why we support the Baker initiative. We welcome the Baker proposal that emphasis should be put on growth in those countries to overcome their problems.

Mr. Tom Clarke: Does the hon. Lady accept that the Baker initiative in itself is hardly sufficient to deal with the enormous world debt crisis, to which the American economy has made a contribution? Does she accept that the Third world is becoming fed up with financing the American deficit, and it is time we made representations in that direction?

Mrs. Chalker: There is no easy answer to anybody's debt problem. To get out of debt is a much harder job than it ever was to get into it. The duty of the developed countries is to promote non-inflationary growth in the world economy so that, by means of open markets, debtor countries can expand and begin to pull back the horrific debt problem. There is no easy answer for developed nations, and certainly none for the underdeveloped nations.

Nicaragua

Mr. Tony Banks: asked the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy concerning the provision of aid by the United States of America to the Contras in Nicaragua; and if this policy has been communicated to the United States.

Mr. Madden: asked the Secretary of State for Foreign and Commonwealth Affairs if he will call for an early meeting of the European Economic Community Council to consider issues raised by United States military aid to the Contras in Nicaragua.

Sir Geoffrey Howe: We support the Contadora peace initiative and, together with our European partners. publicly welcomed the impetus given to Contadora in January by the Carabelleda declaration. We do not believe that the problems of Central America can be solved by armed force. The United States Government are well aware of our views. A further opportunity to discuss the matter with Community Foreign Ministers will arise on 21 April.

Mr. Banks: Has the Secretary of State communicated directly to the American Government the point that funding the Contras amounts to international terrorism and must be condemned by all civilised people?

Sir Geoffrey Howe: We advocate a political solution through the Contadora process rather than a military solution. Nicaragua should be ready to negotiate seriously on the basis of the Contadora objectives and avoid such actions as the recent incursion into Honduras. I repeat that we do not believe that the region's problems can be resolved by armed force. We constantly urge restraint on all sides. We regularly discuss important questions, including the situation in Central America, with the United States and it is well aware of our views.

Mr. Madden: Will the Foreign Secretary dissociate the British Government completely from American support of the Contras, who are guilty of brutal terrorism and of attempting to overthrow a democratically elected Government by force? Does he realise that, unless the British Government take a more robust line in that respect, their condemnation of international terrorism is rendered less effective and appears partial and highly selective?

Sir Geoffrey Howe: The hon. Gentleman must understand what I have just said. We discuss this matter regularly with our Community partners. We have made clear our view that the problems of the region cannot be solved by military means. A solution should come from the region itself. That is why we give our strong support, together with our colleagues in the European Council, to the Contadora process.

Mr. Jackson: Does my right hon. and learned Friend agree that there is a real danger that American policy in

Nicaragua may fall between two stools, neither overturning the Government there, nor reconciling Nicaragua to Western interests?

Sir Geoffrey Howe: That is at heart a matter for the United States, and it is one of the questions that has led to differing views being taken by the two Houses of Congress on the proposal at present before them.

Mr. Peter Bruinvels: Does my right hon. and learned Friend consider it wise for any local authority to twin with Nicaragua, bearing in mind that Leicester city council has announced just that? Does he consider that that might be embarrassing to the—

Mr. Speaker: Order. Funded by America? A bit wide, I think.

Mr. Bruinvels: On a point of order, Mr. Speaker.

Mr. Speaker: The hon. Gentleman must be much more sophisticated than that.

Mr. Bruinvels: I thought that I had made it clear that I was referring to the role of the Contras and asking whether it was embarrassing for the Government to have any connection with the Contras on this.

Mr. Speaker: Order. The question concerns aid from the United States Government to the Contras.

Mr. Ernie Ross: Should not the Foreign Secretary, as he has already said to the House, be building on the clear difference that there is between the two Houses of Congress in the United States and the President and giving support to those forces in America who realise that President Reagan's initiative, which appears to be his own, will not help the Contras of Central America? Should he not be assisting those in America who believe that the best way forward is to work with the members of the Contadora group and to meet the democratically elected Government of Nicaragua?

Sir Geoffrey Howe: I have made it plain in answer to almost every one of the questions so far asked on this matter that the United States Government are well aware of our views on this question, upon which we have our own policy. We support a comprehensive and verifiable Contadora agreement, based on the well-known objectives of that process. We believe that the matter should be resolved by a political solution rather than by military means.

Mr. Cyril D. Townsend: Does my right hon. and learned Friend accept that this is an issue on which frank speaking by friends of the United States must serve the interests both of this country and of the United States? Is it not becoming obvious that the exaggerated and endless claims that Nicaragua represents a major threat to that great country are unhelpful to its European partners?

Sir Geoffrey Howe: One must make a judgment on the claims of both sides. There is no doubt about the extent to which Nicaragua is observed by a number of the others taking part in the Contadora process as having some responsibility for failure to agree in that process. One of the problems identified at the meeting of the Contadora process earlier this week was Nicaragua's refusal to agree on arms levels. That is one of the matters still to be taken into account. We have made it very clear to everyone concerned that we believe that this problem cannot be


solved by military means and that it is necessary to have restraint on all sides, and in that sense to seek a solution within the Contadora framework.

Mr. Corbyn: Will the Foreign Secretary accept that the only way to put an end to the bestial killings by the Contra forces in Nicaragua over the past seven years is for the British and European Governments to tell the United States very clearly that it must end all military aid, covert and overt, to Honduras and to the Contra forces themselves, as the only way to bring any peace to that region?

Sir Geoffrey Howe: Even if I shared the hon. Gentleman's diagnosis, I am not at all sure that that would be the right way to advance his case. I shall restate the case that I have made many times this afternoon. We have discussed this matter many times with our Community partners and have reached a common view about the need for this problem to be solved not by military but by political means, and to be solved on the basis of restraint on all sides—I repeat, on all sides. The United States is in no doubt at all about our view.

Mr. Healey: First, may I congratulate the Foreign Secretary on his safe return from what must have been an exhausting visit to the subcontinent, and on his acceptance during his visit of a gift of two sheep, which I trust are both still in good health.
On the question of American aid to the Contras, who are conducting a terrorist compaign against the legally elected Government of Nicaragua, may I take it that the right hon. and learned Gentleman's somewhat encouraging reply to earlier questions implies that he would support all members of the Contadora group in opposing military aid by the United States to those terrorists? Is the right hon. and learned Gentleman aware that the Governments of Honduras and Costa Rica have already made it clear that the American Administration told lies about their view on the issue, and that in a BBC broadcast a week or so ago the American ambassador in Costa Rica also admitted that the American Government had told lies about the views of Contadora countries? Will the right hon. and learned Gentleman therefore confirm my interpretation of his cautious answer as meaning that he opposes American aid to the Contras, who are fighting a terrorist compaign against Nicaragua?

Sir Geoffrey Howe: I shall not follow the right hon. Gentleman on his discursive and anecdotal ramble through a series of observations—[HON MEMBERS: "Yes or no?"]—save only to say that the Contadora objectives require all sides to end the support for the subversion of other states. That applies to Nicaragua as well as any other state. It is on that basis—the basis of restraint on all sides—that we urge a conclusion of the problem, on the basis of the Contadora principles.

Namibia

Mr. Colvin: asked the Secretary of State for Foreign Affairs if he is planning further consultations with the front-line states about the future of Namibia.

Mrs. Chalker: We remain in touch with front-line states individually on this and other questions.
The last occasion when Namibia was discussed was when my right hon. and learned Friend went to Lusaka for the meeting between the European Community and frontline states.

Mr. Colvin: Has not the time come for Britain to take the initiative in trying to break the deadlock over Namibia? What is my hon. Friend's response to the call for a constitutional conference, to be convened by Britain and attended by all the political parties in Namibia, to try to decide on the best way to implement United Nations resolution 435?

Mrs. Chalker: We remain committed to Security Council resolution 435, which is the internationally agreed basis for a Namibian settlement. I understand the frustration felt because of the lack of progress, but I am convinced that the only real solution to the problems of Namibia lies in the territory being brought to internationally acceptable independence through the early implementation of the United Nations plan. We urgently need, not so much a conference to discuss the implementation of the United Nations plan, as the agreement of the South Africans to fulfil without further delay or precondition their formal commitment to Security Council resolution 435.
I am listening carefully to all that is said on the issue, so that we may have some influence in a positive outcome.

Sir John Biggs-Davison: Can my hon. Friend confirm that under its present Administration Namibia is now free of apartheid?

Mrs. Chalker: I wish that I could confirm that that was true, but unfortunately as yet there is no Namibian legislation to end the key features of racial discrimination. I understand that something now occurring in Namibia may bring that about, but it is not yet in legislation. I must wait to see any legislation before I can answer my hon. Friend in the way that I would like to do.

Mr. George Robertson: Is the Minister aware of how important will be the United States role in any final settlement of the Namibian problem? What future is there for the idea of a concerted engagement while the United States is giving to Unita forces Stinger missiles that will be used against the legal Government of Angola? Does that not destroy any possibility of the United States having any influence in achieving the solution that we all want?

Mrs. Chalker: I understand the hon. Gentleman's frustration. Although I do not share all his views, he knows from our discussions that there is grave anxiety about the interconnections between Angola and Namibia. On another plane, the United States Administration has been making strenuous efforts to be more positive in trying to bring about the implementation of Security Council resolution 435 in Namibia. However, that does not excuse them for the position in which they now find themselves. We must watch the position with great care and try to influence what is happening.

Mr. Cockeram: Will my hon. Friend bear in mind Britain's historic role in that part of Africa, which places us in a unique position to give a lead?
Is it not a matter of regret that Foreign Office Ministers decided not to meet two leading statesmen from Namibia when they visited London recently?

Mrs. Chalker: I understand my hon. Friend's frustration. We have met members of individual parties in


circumstances where we do not recognise transitional or interim Governments, provided it is understood that those members of individual parties are requesting meetings with Ministers on that basis. It would not be sensible to meet representatives of a transitional or interim Government. The Namibia Office is on record as saying that it acts for the interim or transitional Government, and will not represent any individual party within that Government. That presents us with a difficult position. We shall continue to do our best to maintain official contacts, and we hope that future offers made by the Foreign Office will not be refused.

South Africa

Mr. John Carlisle: asked the Secretary of State for Foreign and Commonwealth Affairs when he expects to receive the report of the Commonwealth group of eminent persons who recently visited South Africa.

Sir Geoffrey Howe: Under the terms of the Commonwealth accord, the group is to report within a six-month period to the Heads of Government of the seven Commonwealth states, including the United Kingdom, charged with establishing the group. The present understanding is that this period should begin from 1 January 1986.

Mr. Carlisle: When my right hon. and learned Friend receives the report from the Commonwealth group, will he try to influence other Commonwealth leaders to make sure that the report is received on the basis of trying to promote peaceful dialogue and an end of violence, rather than of concentrating on the evidence of apartheid? Will he use his influence with other Commonwealth Governments to make sure that they do not upset the very happy atmosphere which has existed between the Commonwealth group and the South African Government?

Sir Geoffrey Howe: I am glad to hear my hon. Friend's recognition of the importance of the work of the group, which has been widely recognised, not only by the Governments constituting it, but by the front-line states, by the European Community, and more widely still. We certainly wish that its work will enable the process of dialogue, which is crucial to the ending of apartheid, to begin, and we will sustain the group as well as we can in the furtherance of that objective.

Mr. Winnick: Would it not be useful if the Foreign Secretary told his hon. Friend the Member for Luton, North (Mr. Carlisle) that the violence and bloodshed in South Africa arise, first and foremost, from the denial of basic political rights to the majority of the people for so long? Will the Foreign Secretary tell us what pressure is being brought to bear by the British and other European Governments to ensure that Nelson Mandela is freed without conditions, and that this freedom from an imprisonment that has lasted for a quarter of a century is granted as quickly as possible?

Sir Geoffrey Howe: It is unusual for me to be able to respond in an assenting fashion to the hon. Member, but I share his deep concern at the latest violence and deaths in South Africa. I underline, as we have often done, the urgent need for dialogue and for the suspension of violence, and I will continue to urge that on all parties. We have made it plain on many occasions that the

unconditional release of Nelson Mandela would constitute a major act of national reconciliation in South Africa, and could provide the impetus for genuine dialogue and peaceful settlement. We have stressed the importance of that move to the South African Government.

Mr. Dykes: If it becomes increasingly clear, as is suspected more and more, that the South African Government have no real intention of introducing profound reforms, will that influence the Government's judgment about the need to proceed to full sanctions after the report has been studied?

Sir Geoffrey Howe: I hope that my hon. Friend will preserve a more open mind than is implied by his question. The task of achieving the changes in South Africa that almost every Member of the House considers necessary is, by any standards, a very difficult one. The work being undertaken by the Commonwealth group requires it to make contact with many people, including the South African Government, in a very sensitive fashion. We must all be concerned not to prejudge what may or may not be a consequence of a process which is not yet finished, but rather to do everything in our power to sustain the process, understanding the difficulties on all sides, and not underestimating the urgency of the operation.

Mr. Healey: Will the Foreign Secretary use his influence, which is very substantial, as he has indicated, to ensure that the Commonwealth group makes its report in time for the House to debate it before the summer recess? Because Bishop Tutu has risked imprisonment to call for comprehensive economic sanctions against the South African Government, will he now increase economic pressure on South Africa to ensure the release of Nelson Mandela, so that discussions can take place between him and the South African Government, since Mandela is a representative of the African National Congress, which itself represents the overwhelming majority of black South Africans?

Sir Geoffrey Howe: I fear that the right hon. Gentleman appears to base his question on a misunderstanding of what is taking place at the moment. The present stage, which results from the Commonwealth conference, is that the Commonwealth decided on certain measures to be taken, and that position was to be held until the Commonwealth group had completed its work. So it would be quite unfruitful for us now to begin taking isolated action of the kind that he suggests. The important thing is to maintain that atmosphere in which the constituent members of the group and their supporting Governments are reaching out to try to put in the next steps towards dialogue. That is what we are trying to do. I acknowledge the important role that Mr. Nelson Mandela could play, but I do not believe that a sudden resort to sanctions at this stage by us or by anyone else would help in promoting that role.

Mr. Speaker: Mr. Peter Thurnham.

Mr. Healey: Will the Foreign Secretary answer the question?

Mr. Speaker: Order.

Departmental Costs

Mr. Thurnham: asked the Secretary of State for Foreign and Commonwealth Affairs what are the estimated costs of administering his Department during 1986–87.

Mr. Eggar: The estimated gross running costs of the Foreign and Commonwealth Office during 1986–87 are £369 million for the diplomatic wing and £37 million for the ODA.

Mr. Thurnham: Can my hon. Friend say whether he expects any additional expenses due to increased duties relating to immigration controls and drug trafficking intelligence?

Mr. Eggar: As I think my hon. Friend is aware, we have sent additional staff to posts in the subcontinent and have thus been able to reduce substantially waiting times for first interviews in the subcontinent. The latest figures show that all applicants applying for the first time can expect to be interviewed within 12 months. On the question of drugs, we have put additional resources in London and at overseas posts to try to combat the tremendous drug trafficking problems that we face throughout the world. Both immigration and drugs are good examples of where new demands on the Foreign and Commonwealth Office have been met by the redeployment of existing resources.

Mr. Campbell-Savours: Has the Minister read the Public Accounts Committee reports on Foreign Office estates and the exorbitant prices paid by British diplomats, funded by the Exchequer, for accommodation? Does he intend to intervene in the affair of the sale of a flat in Paris for some £800,000 with a view to making economies, when that flat was replaced by another at a cost of £450,000, so we are informed, with additional expenditure of several hundred thousand pounds on doing up the premises and on legal expenses? Where was the economy in that transaction? Should not the Department be reviewing its position?

Mr. Eggar: With regard to the flat in Paris, the Minister's flat has been disposed of and a replacement flat has been purchased at a cost of about £450,000. That new flat is considerably smaller than the existing flat and will be much cheaper to run. As general policy, the Foreign Office is trying to reduce its reliance on rented property, since there is a considerable real increase in rents, and to increase its reliance on owned property.

Mr. Stokes: Is my hon. Friend aware that the Foreign Office has made great strides since the Falklands war, particularly under the leadership of my right hon. and learned Friend? Furthermore, is he aware that we expect our diplomats to be housed properly? Compared with the cost of some local government, the entire cost of the Foreign Office is cheap at the price.

Mr. Eggar: I agree with my hon. Friend. We are in the process of a further rationalisation of our overseas estates to ensure that we dispose of any surplus properties and use the funds so recycled to purchase more appropriate properties where necessary.

Terrorism

Mrs. Renée Short: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make

it his policy to consult his European counterparts to consider imposing sanctions including the suspension of air services on any country that harbours terrorists; and if he will make a statement.

Sir Geoffrey Howe: Before dealing with this question, Mr. Speaker, may I respond to the right hon. Member for Leeds, East (Mr. Healey), who obliterated the conclusion of our last question? I have not answered the second part of his quesion. It is not possible to say that the proceedings of the Commonwealth group will be determined or conditioned by the needs of the House, but certainly I shall try to bear the needs of the House in mind. The Commonwealth group will operate to achieve its own objectives.
So far as this question is concerned, our experience with economic sanctions has not persuaded us that they are likely to be an effective response to states which are alleged to be harbouring or sponsoring international terrorists. We shall continue to take all possible countermeasures, both nationally and in conjunction with other like-minded countries, to do everything that we can to deter and prevent terrorism.

Mrs. Short: I had hoped that the Secretary of State would be a little more forthcoming in his reply to my question. As the international airline pilots are holding their conference in London, will he send a message to that conference to let them know that Her Majesty's Government support their call for sanctions against countries such as Libya and Syria, for example, and that we shall ban flights to and from those countries as long as they continue their terrosist activities?

Sir Geoffrey Howe: I am certainly very much aware of the real interest of the airline pilots in the war against terrorism, including, in particular, airborne terrorism. But the measure suggested in the hon. Lady's question, the suspension of air services, is considered only in the context of states failing to observe the relevant international conventions on hijacking. Not only do we condemn terrorism, but we have taken measures, and will urge those measures wherever necessary, including a full exchange of information and intelligence on terrorists and the effective monitoring of the movement and actions of terrorists to ensure that they are in compliance with the law, and in cases such as Libya, as the House well knows, the conclusion of diplomatic relations, the prohibition of the export of defence equipment and, perhaps most important, the imposition of severe restrictions on Libyan immigration to Britain. We are certainly ready to press for the taking of the most appropriate range of measures as effectively as possible in that kind of case.

Mr. Churchill: In view of what my right hon. and learned Friend has just said about the steps already taken by Her Majesty's Government to prevent air piracy and international terrorism, does he not think that one contribution we could make to the cause of international air safety would be to give their marching orders to those Libyans at present employed at Heathrow and Gatwick airports, with airside security passes provided to them? What advice has his Department given to the Home Department in this regard?

Sir Geoffrey Howe: My hon. Friend recognises the importance of the steps that we have already taken to impose severe restrictions on Libyan emigration to


Britain. That control is exercised by my right hon. Friend the Home Secretary. He has made his views on international terrorism very clear. He has made it equally clear that he is willing to act against those who seek to import violence, and he has the particular measures under constant review.

European Community (Foreign Affairs Council)

Mr. James Hamilton: asked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions have been held in the European Community Foreign Affairs Council regarding a supplementary budget later in the current year; and if he will make a statement.

Mrs. Chalker: The most recent discussion was during the Council of Finance Ministers held at the same time as the Foreign Affairs Council, on 10 March. I refer the hon. Member to the statement made by my hon. Friend the Minister of State, Treasury in reply to a question from my hon. Friend the Member for Nottingham, East (Mr. Knowles), on 14 March.

Mr. Hamilton: How could the Foreign Secretary and his colleagues have underestimated Common Market spending by so much that a supplementary budget is necessary? Does the Minister not agree that Community spending is now out of control? What about the budget discipline that we have heard so much about?

Mrs. Chalker: It is not that Community spending is out of control, unless certain nations, and that excludes this country, press for unrealistic agriculture budgets. What the Commission will be proposing in a supplementary budget this year will be a provision of about 450 mecu. to increase our 1985 abatement. It has also said that it will propose a supplementary provision for agriculture, which arises from the fall in the dollar-ecu rate. In our view, the correct response should be to seek savings in the agriculture budget and in that way reduce the surplus. We should then be in a far better position not to require such a repetition of events.

African National Congress

Mr. Adley: asked the Secretary of State for Foreign and Commonwealth Affairs when he expects the next meeting to take place between his officials and members of the African National Congress; and if he will make a statement.

Sir Geoffrey Howe: As foreshadowed to the House on 5 March, contacts between officials and the ANC are continuing as appropriate. The central purpose of such contact is to bring home to the ANC the importance of a suspension of violence on all sides in South Africa in order to promote constructive dialogue. We have not agreed to any ministerial contact.

Mr. Adley: I welcome the decision of my right hon. and learned Friend's officials to meet the ANC. Can he confirm that the eminent persons group has also had meetings with the ANC? As the ANC represents the views of the large majority of non-white people in South Africa, notwithstanding the propaganda put out to the contrary by the South African Government, will my right hon. and learned Friend ensure that as much conversation and dialogue as possible take place so that we can try to find

a solution in South Africa by peaceful means and avoid the violent means that will be inevitable if that is not achieved?

Sir Geoffrey Howe: The Commonwealth eminent persons group met a wide range of people both inside and outside South Africa, including, of course, representatives or members of the ANC. That contact has been provided for because of the role that they occupy, or could occupy.

Argentina

Mr. Willie W. Hamilton: asked the Secretary of State for Foreign and Commonwealth Affairs if he will now seek to re-establish diplomatic relations with Argentina; and if he will make a statement.

Mr. Eggar: As my right hon. and learned Friend the Foreign Secretary said to the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) on 5 March, we wish to move towards more normal relations with Argentina. We have taken numerous steps to achieve this; the Argentine Government have still to respond constructively.

Mr. Hamilton: Is the Minister aware that there has been a rapid erosion of international support for the Government's inflexible policy, which is, in the meantime, costing the hard-pressed British taxpayers hundreds of millions of pounds every year? Does he not realise that every other party in the House is committed to ending that absurd policy straight after the next election? In those circumstances, will he do more to protect the interests of British taxpayers?

Mr. Eggar: The majority of the cost is behind us now, as expenditure on Mount Pleasant airport has decreased. But is the hon. Gentleman really saying that all other parties are prepared to pay no attention to the Falklanders' right of self-determination?

Sir Frederic Bennett: On a point of order, Mr. Speaker.

Mr. Speaker: Does it arise from questions?

Sir Frederic Bennett: Yes, Sir.

Mr. Speaker: Then I will take it.

Sir Frederic Bennett: I wish to raise a brief and entirely non-partisan point of order, which I think will be of interest to hon. Members on both sides of the House. In reply to question 3, concerning another country's citizens receiving military training in Britain, the Minister gave a full answer and an exchange followed between hon. Members on both sides of the House, about which no one can complain. But when, in a supplementary question, I asked whether similar information—

Mr. Speaker: Order. Points of order must interest me.

Sir Frederic Bennett: They will, or at least I hope they will. When I then asked whether similar questions could be answered about other countries, I was told that the answer was no, because such arrangements were confidential as between the countries concerned—

Mr. Speaker: Order. I am afraid that that is not my responsibility.

Ownership of the Media

Mr. Tony Lloyd: I beg to move,
That leave be given to bring in a Bill to restrict the shareholdings of non-United Kingdom individuals and companies in all newspaper, television and radio companies operating in the United Kingdom, and to place controls on the transfer of shareholdings in such companies.
It is inevitable that recent events at Wapping should have concentrated the public's mind on the unaccountability and gross unacceptability of the conduct of Rupert Murdoch as a newspaper proprietor. I think that even Conservative Members will freely acknowledge that Rupert Murdoch's contribution has not raised the standards of British journalism. His main contribution has been to introduce "page three" into our language, so perhaps we should not entrust to him the destiny of the British press.

Mr. Derek Fatchett: He has even given gutters a bad name.

Mr. Lloyd: As my hon. Friend says, he has even given gutters a bad name. Yet, surprisingly, we are apparently free and happy to allow him to expand his interests throughout not only the press, but the media generally.
The purpose of the Bill is to examine the problem of concentration in the newspaper industry and, more generally, in radio and television. Our media industry is one of the most concentrated in the world. Eight companies or individuals control virtually the whole of the national daily and Sunday press. Fourteen out of 16 independent television companies are individually controlled by 16 or fewer shareholders and, where full details are easily available of the 41 independent local radio contractors, all but one are controlled by fewer than 10 shareholders. There is a massive concentration, even at company level. To make matters worse, many of the shareholders are shareholders of other organisations, so that Rupert Murdoch not only controls News International, but is a significant shareholder in London Weekend Television.
The Mirror Group of Newspapers, for example, which controls the second largest slice of the British press, is a significant shareholder in Central Television. United Newspapers, the present owners of the Express stable, have significant shareholdings in Tyne-Tees, Yorkshire Television, Harlech Television, and TV-am. To make matters worse, what would seem highly improbable to someone entering Britain for the first time is that we exercise no control over where this ownership comes from. Thus, specifically 54 per cent. of the circulation of the national papers is in the hands of what are ultimately foreign-based companies.
We all know that recently, as an illustration of great patriotism, Murdock renounced his Australian citizenship in order to embrace his new love—the United States. Yet at no time has there been any need for Murdock to offer any allegiance to or care for this country in which he has such significant media holdings. It has been said that the same situation applies to a lesser extent to the Liechtenstein-based company which ultimately owns the Mirror Group of Newspapers.

Mr. Peter Bruinvels: A Labour Member of Parliament.

Mr. Lloyd: The hon. Gentleman seems to be under the impression that the proprietors of the Mirror Group of Newspapers are Labour Members of Parliament. Clearly he is as confused in his knowledge of the press as he is in most other areas.
Similar problems of concentration of ownership arise in the context of television and radio broadcasting. When the Rank Organisation recently made a well-publicised attempt to take over Granada Television, a statement by Rank at the time claimed that the combination of these two companies would be in the commercial interests of both. Yet at no stage was any mention made of an attempt to maintain journalistic standards or to protect the right of the public to have an acceptable quality of television output.
Those factors simply did not figure in the reasons why the Rank Organisation launched that attempted takeover. Nor did they figure in Ladbroke's consideration of a merger with Granada. Fortunately, in the Rank case the Independent Broadcasting Authority decided that the takeover was unacceptable and ruled that it could not go ahead, and it did not go ahead. It may be thought, therefore, that the IBA has the power to stop the predatory activity of organisations in relation to radio and television companies, but that simply is not the case, because the logic that debarred the Rank Organisation from taking over Granada Television did not stop the Granada group of companies from having television broadcasting as a minor part of its activities, so that it accounts for less than 20 per cent. of Granada's annual turnover. Thus, television is not a significant part of Granada's corporate plan.
It is not surprising that the chairman of Rank said that it would be inequitable if action by the IBA was to obstruct Granada shareholders from benefiting from a Rank takeover. I have considerable sympathy for the Rank Organisation, not because the takeover was right but because it seems very peculiar that a takeover by one conglomerate should not be acceptable while another conglomerate can operate in much the same way. Of course, overseas it is common practice for there to be restrictions on the rights of transfer of shareholdings in the press and in television and radio companies. For example, we know that Rupert Murdoch's motivation in becoming an American citizen was dictated not by any great love of Ronald Reagan—and I sympathise with that—but purely because American laws dictated that he could not be the owner of significant holdings in television companies if he were not a United States citizen. Ironically, because he had to take out American citizenship and renounce his Australian citizenship, Mr. Murdoch has now been forced by Australian laws to give up some holdings in Australian television companies.
What the Bills seeks to do is simple. It seeks to prevent non-United Kingdom residents from having significant shareholdings in companies which operate press, television or radio organisations and limits the size of indvidual shareholdings to prevent unacceptable behaviour such as that which we have witnessed from Eddie Shah and Rupert Murdoch, and which we have increasingly witnessed from directors whose only interest is economic and has nothing to do with the maintenance of standards. I am sure that the Bill will commend itself to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tony Lloyd, Mrs. Ann Clwyd, Mr. Derek Fatchett, Mr. Sean Hughes, Mr. Terry Lewis, and Mr. Ken Eastham.

OWNERSHIP OF THE MEDIA

Mr. Tony Lloyd accordingly presented a Bill to restrict the shareholdings and radio companies operating in the United Kingdom, and to place controls on the transfer of shareholdings in such companies: And the same was read the First time; and ordered to be read a Second time upon Friday 11 April and to be printed. [Bill 128.]

Airports Bill

Mr. Speaker: Yesterday the right hon. Member for Manchester, Wythenshawe (Mr. Morris) asked for my ruling on whether the altered status of Manchester international airport rendered the Airports Bill prima facie hybrid.
I am grateful to the right hon. Gentleman for giving me oral notice of this matter yesterday and for sending me a detailed written submission because it has enabled me to look into the matter in great detail and to reach a considered decision.
The right hon. Gentleman submitted that the newly constituted Manchester airport company, created on 1 April after the Bill was reported from Standing Committee, is being singled out from other airports in its class and that the Bill is therefore hybrid. My duty is to look at the terms of the Bill and to see whether it singles out an airport or airport company for treatment different from others in the same class.
When I look at this Bill, I see that the classes of the airports, airports companies and local authorities are drawn entirely in general terms, and that there is no discrimination within those classes. The changed status of Manchester international airport has therefore not made the Airports Bill a hybrid Bill.

Mr. Alfred Morris: I am grateful to you, Mr. Speaker, for the earnest consideration which I know that you have given to my application. With others on both sides of the House, I shall naturally want to reflect on a very important statement. Meanwhile, may I thank the Officers of the House with whom I have been in contact on this matter for their unfailing help and courtesy?

Mr. Speaker: I thank the right hon. Gentleman.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. I am sorry to raise this matter, but you will know that one and a quarter hours were spent yesterday on a series of points of order. I want not to repeat what was said yesterday but to raise with you a question which relates to yesterday.
You will know, Mr. Speaker, that the argument was that hon. Members had been led to believe that certain documents would be made available before the debate. The Chair ruled repeatedly that that was a matter for Ministers. When the House is being disrupted and its proceedings are being delayed, as was the case yesterday, would you not wish to express a view which might influence Ministers' judgments when they are deciding when to make documents available?
My hon. Friend the Member for Dunfermline, West (Mr. Douglas) came into the Chamber with an enormous pile of documents which had been put in the Library at 3.30 pm—approximately half an hour before the debate. It was clear that no hon. Member was able to discuss or examine those documents or to examine relevant issues about which there was information in the documents. May I put it to you, Mr. Speaker, that you might wish to deprecate the practice of Ministers refusing to allow sufficient time to enable hon. Members to study such material? Such information, had it been available, would have had some bearing on yesterday's debate.

Mr. Speaker: I thank the hon. Gentleman. I confirm that Mr. Deputy Speaker was in the Chair at the time and


was correct in what he said. When documents are made available is a matter for the Government, not for the Chair. I note also that Mr. Deputy Speaker allowed a dilatory motion to be moved, so the decision was placed in the hands of the House.

Orders of the Day — Airports Bill

As amended (in the Standing Committee), considered.

New Clause 1

COMPENSATION FOR LOSS OR DIMINUTION OF PENSION RIGHTS

'(1) The Secretary of State may provide by regulations for the payment, by such persons as may be prescribed by or determined under the regulations, in such cases and to such extent as may be so prescribed or determined, of pensions, allowances or gratuities by way of compensation to or in respect of persons who have suffered loss or diminution of pension rights by reason of—

(a) any transfer of property, rights and liabilies under section 14(7), or
(b) the disposal under section 19(2) of any interests held by a principal council in a public airport company.

(2) Regulations under this section may—

(a) include provision as to the manner in which and the persons to whom any claim for compensation is to be made, and for the determination of all questions arising under the regulations;
(b) make or authorise the Secretary of State to make exceptions and conditions in relation to any classes of persons or any circumstances to which the regulations apply; and
(c) be framed so as to have effect from a date earlier than the making of the regulations;

but regulations having effect from a date earlier than their making shall not place any individual who is qualified to participate in the benefits for which the regulations provide in a worse position than he would have been if the regulations had been framed so as to have effect only from the date of their making.

(3) Regulations under this section may include either or both of the following provisions, namely—

(a) provision authorising the payment, without probate (or, in Scotland, confirmation) and without other proof of title, of any sum due under the regulations in respect of a person who has died to his personal representatives or such other persons as may be described by the regulations; and
(b) provision rendering void any assignment of (or, in Scotland, assignation of) or charge on, or any agreement to assign or charge, any benefit under the regulations, and provision that on the bankruptcy of a person entitled to such a benefit (or, in Scotland, sequestration of the estate of, or granting of a trust deed for creditors by, such a person) no part of it shall pass to any trustee or other person acting on behalf of the creditors, except in accordance with an order made by a court in pursuance of any enactment specified in the regulations.

(4) Subject to subsection (5), where regulations under this section have made provision for the payment of pensions, allowances or gratuities as mentioned in subsection (1), compensation in respect of any such loss or diminution of pension rights as is mentioned in that subsection shall be paid only in accordance with those regulations in any case to which those regulations apply; and accordingly such compensation shall not be paid under any other statutory provision, by virtue of any provision in a contract or otherwise.

(5) Subsection (4) shall not prevent the payment of any sum to which a person is entitled by virtue of contractual rights acquired by him before such date as the Secretary of State may by order specify.

(6) Any regulations or order made under this section by the Secretary of State may make different provision for different cases to which those regulations or that order apply or applies, as the case may be, and may in particular make different provision as respects different areas.

(7) In this section—


"pension", in relation to a person, means a pension, whether contributory or not, of any kind whatsoever payable to or in respect of him, and includes—

(a) a gratuity so payable;
(b) a return of contributions to a pension fund, with or without interest on or any other addition to those contributions; and
(c) any sums payable on or in respect of the death of that person;

"pension rights" includes, in relation to any person, all forms of right to or eligibility for the present or future payment of a pension, and any expectation of the accruer of a pension under any customary practice, and includes a right of allocation in respect of the present or future payment of a pension.'.—[Mr. Ridley.]

Brought up, and read the First time.

The Secretary of State for Transport (Mr. Nicholas Ridley): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this, it will be convenient to take the following:

New clause 4—Superannuation and pension rights—

'(1) No change shall be made to the structure, provisions or coverage of the BAA superannuation scheme without the agreement of those presently recognised trade unions who are members of the BAA Central Negotiating Committee.
(2) No scheme providing for the transfer to a company of the business of operating a local authority undertaking or any activities incidental to or connected with carrying on that business shall be approved by the Secretary of State unless it provides for the establishment by the principal council of a body to administer the pension funds of such a company.'.

New clause 5—Pay and conditions—

'(1) Neither the company to which the rights, property and liabilities of BAA are transferred nor any of its subsidiaries may introduce into the national agreements now in force with the central trade unions any term less favourable than the current terms, nor may they in any respect worsen the pay and conditions of service now obtaining for BAA employees without the agreement of all the presently recognised central trade unions.
(2) The Secretary of State shall not approve any scheme for the creation of a company to carry on the business of operating a local authority airport or any activities incidental to or connected with carrying on that business, unless that scheme provides for any existing employees of a council to be transferred to the company upon terms of employment no less favourable to them than those under which they are employed immediately prior to such transfer.'.

Government amendment No. 64.

Mr. Ridley: On 4 March during the debate in Standing Committee, at column 384 of the Official Report I said that two options were open to public airport companies in respect of their employees' pensions. Staff transferred to the airport company may, under subordinate legislation, be deemed to remain employees of the local authority concerned while that company remains in the ownership of the parent authority. That is known as the deeming option. Alternatively, the company may negotiate continuing membership of the local government superannuation scheme while the local authority continues to own most of it. That is the admission agreement option. Under either option, nothing changes for the employees as their pension rights continue under the local government superannuation scheme.
The hon. Member for Aberdeen, North (Mr. Hughes) had some doubts about pension rights transfer, as evidenced by his proposed amendment in Committee. I undertook to see whether further measures were needed to safeguard the interests of transferred employees' pensions.
The deeming option or admission agreement option would, of course, have to be negotiated by the company and the parent authority. Although I am certain that the two parties could reach an agreement in every case, I must accept that it is just possible that an airport company finding the going difficult might seek a cheaper scheme and try to economise by leaving the local authority scheme. To cover that possibility—remote though it may be—I am pleased to introduce the new clause, which is modelled closely on section 84 of the Transport Act 1985 together with its associated consequential amendment, which provides the powers necessary for me to make regulations providing for compensation to be paid to public airport company employees who suffer loss or diminution of pension rights. I hope not to have to use the powers, but I assure the House that I will not hesitate to do so if necessary.
The hon. Member for Aberdeen, North returns to that point in new clause 4 and has a slightly wider point in new clause 5. It might be convenient if I responded to his arguments on those new clauses when I have heard them. I warn him in advance that we believe that the new clause 4 is unnecessary and that new clause 5 might be undesirable.

Mr. Robert Hughes: I am grateful to the Minister for his few remarks at the beginning of this debate. Especially in view of his final comments on new clauses 4 and 5, it might be convenient if I said now that, at the appropriate time, I shall request separate Divisions on new clauses 4 and 5 unless—which is unlikely—my eloquence persuades the Minister to accept both.
New clause 1 is welcome in that it recognises that a problem could arise for existing employees should a privatised company or a public limited company formerly in the direct ownership and control of local authorities move towards a pension or superannuation scheme which is less beneficial to employees than that which they currently enjoy.
New clause 1 is merely an enabling measure and is hedged about with all sorts of conditions. It is no more than a grace-and-favour clause and I for one have no faith that the Secretary of State will approach the issue with sufficient resolution and determination to ensure that justice is done.
We all have the benefit of the record to go by. We know, for example, that the 15,000 staff of the National Bus Company lost their guarantee to index-linked pensions as a result of the Transport Act 1985. New clause 1 goes in a direction that is dramatically opposite to the policy which would protect employees by having their pension rights guaranteed. The only thing that is guaranteed under the Secretary of State's policy is that in the drive and thrust for profit the well-being of employees will take second place.
The philosophy of the Secretary of State is the true philosophy of the Conservative party. He is open about this and has made it clear that he will have no truck with the benevolent face that the Government are seeking to show to the public, which is the face of caring capitalism. He is so proud of the fact that he states his opposition to such an approach on every possible occasion. At the same time other Ministers are trying busily to sell to the public a policy that suggests that private pension schemes provide the best answer to the problem of pension provision in future. Other Ministers are encouraging the public to make


their own private pension arrangements. However, schemes have been built up over decades that have been negotiated between employees and employers and we must retain the better schemes by ensuring that they are enshrined in statute. The best that the Secretary of State can offer in new clause 1 is that if he happens to be in a generous mood he might provide for some compensation. It is clear that it is an enabling provision because it does not say that the Secretary of State shall do anything.
There is nothing in the Bill and nothing in new clause 1 which provides a modicum of protection for British Airports Authority employees.

Mr. Robert Litherland: On a point of order, Mr. Speaker. I crave your indulgence. I have had time to reflect on your ruling on the hybridity of the Bill, which was the issue raised by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). I think that it would be helpful if your statement could be made available to all who wish to participate in the debate.

Mr. Speaker: Every hon. Member who was present in the Chamber will have heard my statement, and it will certainly appear in Hansard.

Mr. Hughes: I was saying that British Airports Authority employees will not have a modicum of protection for their pension arrangements. We have had the experience of previous privatisation legislation and we know that publicly owned companies have taken on the shadowy form of being neither one thing nor the other. These companies have been privatised but we know that they are in the ownership of the Secretary of State. We know also that British Airways changed its pension scheme considerably. It managed to do so by offering financial inducements to existing employees to transfer to the new and less favourable scheme. That does not detract from the argument I am advancing.
New clause 5 seeks to ensure that unions that are involved in the British Airports Authority's central negotiating committee must be consulted about any changes that are suggested to the pension scheme and provides that no change can be made without their agreement. On the local government side, new clause 4 provides that a body should be set up to administer the pension fund of such a company. I anticipate that trade union involvement would be allowed for in this instance.
I turn to pay and conditions, which come within new clause 5, and I shall comment briefly on the background to the costs that are involved in manning and running airports. We know that employee and staff wages in the British Airports Authority are currently the biggest items of expenditure. We also know that the profits generated within the BAA come not from the airport handling but from duty-free and other concessions at Heathrow and Gatwick. Of course, other airports are not in the same position. They do not have access to the throughput of passengers which makes the duty-free and other concessions a major factor in bringing in income.
Over the whole picture it seems clear that pay and conditions of service will be under attack in the efforts to cut costs. In other words, the success of privatisation will be at the expense of workers in the industry who have done so much to make the BAA the successful publicly owned

company that it is now. We believe that workers have a strong right to protection of wages and conditions that have been obtained by many patient years of negotiations. We now fear that all that is under threat and that there may well be moves to decentralise wage bargaining, currently done centrally. We believe that the move will be towards individual negotiations with airport staff at individual airports, notwithstanding the fact that it is currently the BAA's policy to call upon its employees to work at any of the BAA airports.
We also know that the British Airports Authority management has told the workers that their job rights are guaranteed for 12 months after privatisation. After that, the future is extremely murky. It is being said in many quarters that there is no need to worry because the airline business is likely to expand and that with it the policy, programme income and so on generated at airports are also likely to expand.
No one can forecast with any certainty what will happen in the future. There are stories of many of the international airlines being in difficulty and there is some doubt whether the traffic will grow to the extent forecast. Although the argument is that the present work force has no fears for the future, that is not the case. I believe that attempts will be made to contract out services which are currently done in-house in an attempt to drive down costs and weaken the bargaining position of trade unions.
The Government's position is quite clear and they have never hidden it. They believe that market forces will take care of all those things—pay, conditions and pensions. They believe that those are issues in which the Government should not seek to interfere. I believe that the Government's policy exposes their claim that they are not anti-trade union as sham and hollow. It is a contradiction for them then to say that they favour responsible trade unions, proper negotiating procedures and that they want to encourage unions to undertake proper and sensible bargaining positions. The trade unions currently employed within the BAA and those employed within local authorities have been extremely responsible. They have bargained sensibly and achieved reasonable pay and conditions. It is sad that, once the airports are privatised, there will be nothing to protect them from the ravages of Government policy and there is nothing in the Bill that will do that.
We believe that trade unions should be encouraged. We believe that pay and conditions should be protected. The Government clearly do not. New clauses 4 and 5 seek to erect a barrier against predatory companies which may not have the welfare of employees at heart. The clauses will give a guarantee against the damaging change by encouraging negotiations. For those reasons, we shall seek to write new clauses 4 and 5 into the Bill.

Mr. Ridley: The hon. Gentleman has now advanced the argument for new clauses 4 and 5, and I shall respond to it. He said that the Transport Act 1985 had deprived the busmen of the guarantee of their pension schemes. With respect—I mention this only because it is relevant to the new clauses—that is not the case, because there was never a guarantee of the National Bus Company pension funds. There is not a guarantee of the BAA's pension fund as at present constituted, nor is there a guarantee of any nationalised industry pension fund or of the pension fund of any industry which has been privatised. Therefore, we are treating all those pension fund problems on a par with


one another. There has been no precedent for a guarantee of a privatised company's pension fund. In fact, the British Airports Authority provides a generous pension scheme for its employees. Pensions are index-linked and amount to two thirds of pensionable pay on retirement for an employee with 36 years' service.
4 pm
Far from being under threat from privatisation, as the hon. Member for Aberdeen, North (Mr. Hughes) said, after consulting my Department the chairman of the BAA wrote to all the employees on 16 August last year making it clear that the pension rights of the BAA's existing staff and pensioners would remain unaltered as a result of privatisation. The scheme is managed by a board of trustees, which comprises three representatives each from the staff and management sides, plus a chairman. Proposals for amending the scheme are discussed fully at joint meetings of management and work force. The BAA has shown in the past that it is ready to listen to its employees' views, as any good employer should.
Like any private sector company, the BAA must retain the freedom to manage its own affairs, but I am sure that it will continue to do so in full consultation with its work force. It would be wrong to write in, as new clause 4 seeks to do, some sort of guarantee on that matter.
I refer to local authority airports' pension funds. Under new clause 4, a large number of comparatively small pension funds would be set up by local authorities which own airports, for those airports' employees. With respect, there is no difference in quality between that and the proposals in new clause 1. Employees of local authority airport companies should be able to join, or stay in local government superannuation schemes, by one means or another. Indeed, the hon. Gentleman's proposal is less acceptable than mine because it would mean a multiplication of small pension funds administered by bodies without experience.
New clause 5 would impose upon the BAA's successor company and its subsidiaries requirements that would exceed those placed on any other private sector company, or, for that matter, on any employers in the public sector. The agreement of all recognised unions would be required before the introduction of any change in employees' terms and conditions which might include some element that was unfavourable to the unions' members. There is no reason to put that group of people in a privileged position compared with the rest of the work force—that of having statutory protection against changes in their terms of employment additional to that for other employees under existing statutes. For example, they will have, as other employees have, the protection of the Employment Protection (Consolidation Act) 1978, which protects them against any unilateral change in their terms of employment which amounts to constructive unfair dismissal.
The pay of the BAA's employees after privatisation will be a matter for negotiation between employees and management, and I am sure that the hon. Gentleman would not have it any different, or he would not believe in collective bargaining, as he often professes he does. It would be wrong to fetter that process as the new clause proposes.
The second part of new clause 5 is unnecessary. In our view, each transfer of staff to an airport company under a scheme approved by the Secretary of State will be a relevant transfer under the Transfer of Undertakings

(Protection of Employment) Regulations 1981. That means that the staff concerned will become employees on the terms and conditions under their contract with the relevant local authority immediately prior to transfer. In other words, their contracts should then be read as if they had been made with the company rather than with the authority. I am sure hon. Members will agree with me that that is an extremely satisfactory position and that it renders any other provision unnecessary.
Far from accepting the jibes of the hon. Member for Aberdeen, North that we are not looking after the pensions or conditions of the staff of either the BAA or the local authority airports, I believe that I have demonstrated that, with new clause 1 and the present statutory position, every precaution has been taken to secure what is right and proper in an economy where there is still room for collective bargaining over all those matters. I suggest to the House that we accept new clause 1 and the consequent amendment, and reject new clauses 4 and 5.

Mr. Tam Dalyell: I should like the Secretary of State to clarify something for me.
It has been put to me by trade union representatives at Edinburgh airport that their members might be disadvantaged, given traffic forecasts for forthcoming years, by accepting the proposed arrangements. After what the right hon. Gentleman has just said, am I entitled to go back to those representatives of the staff at the airport and assure them that he has given an undertaking to the Commons that they will not be so disadvantaged following the transfer?

Mr. Ridley: In response to the hon. Gentleman's question, I am not clear in what sense the employees of Edinburgh airport are suggesting that they might be disadvantaged. There is no possibility of their being disadvantaged in respect of their pension rights, compared with what would happen if they stayed in the public sector in the local authority scheme.

Mr. George Park: As I understand it, the object of the Bill is to privatise the airports and, in so doing, make them more efficient. When I read the Bill I was surprised to find that there is nothing in it which refers to probably the most vital part of the prosperity and efficiency of any undertaking, whether public or private—that is, matters connected with the work force. That is particularly relevant in this case because most of the cost of running an airport is in the wages and salaries paid to the employees. Therefore, I was surprised that there was no mention of that. That is why we have felt it necessary to table new clauses 4 and 5.
It is undoubtedly true that there is a feeling of insecurity among the employees at the airports. They are not sure how they will fare with privatisation. The experience of privatisations in other industries does not give them much confidence. I am sure that they would prefer to see something in writing rather than accept the bland assurances of the Secretary of State and then find the whole thing blowing up in their face.
Therefore, new clause 4 sets down in writing the reference to
recognised trade unions who are members of the BAA. Central Negotiating Committee.
Under the new clause, the unions will continue to function and to have a say in agreements that they have built up over


a long time and that they wish to maintain. The new clause does not seek to add anything; it seeks merely to protect the current position.
The same applies to new clause 5, which refers to pay and conditions being no
less favourable than the current terms".
Therefore, in new clauses 4 and 5 we are not trying to raise the ante, to try to gain some advantage for the employees in the interim period. What is absolutely essential is that something should be written into the Bill, as is proposed by new clauses 4 and 5, giving a firm assurance and a sense of security to the current employees. That would undoubtedly help to maintain and improve the efficiency of the airports.
I am surprised that the Secretary of State cannot see the matter in this light. It is not good enough to brush it to one side and say that what we propose is unnecessary. The Secretary of State said that, if required, he would step in, but he has not been all that smart in jumping in on other situations when employees were extremely worried about their pay and conditions.
These new clauses are an attempt to introduce a modicum of security for employees. They will enable employees to feel that, under privatisation, they will have a future for themselves and their families. All that we are seeking to do is to make it clear to employees that that is the intention of the Opposition, whether or not it is the intention of the Government.

Mr. David Lambie: If the Bill becomes an Act, I am interested, as a Scottish Member, in the fact that the four major airports in Scotland will be controlled by the new BAA company and that the rest of the airports of the Highlands and Islands will be controlled by the CAA.
I have listened to the assurances of the Secretary of State that the workers of the privatised BAA will not be disadvantaged compared with the workers in other similar privatised schemes. Can the right hon. Gentleman tell me whether superannuation pensions and conditions of work will be the same for the workers of the Highlands and Islands airports as those for the workers in the four Scottish airports which will be under the control of the BAA?
We have been given assurances from Sir Norman Payne and the present management of the BAA about what will happen when the newly privatised set-up takes over. However, Sir Norman will not continue indefinitely at the BAA. I am therefore concerned about the future.
There are provisions in the Bill to allow foreign people to buy control of BAA. Therefore, the outlook of the new management could be entirely different. We may get the American or Australian type of management which we are witnessing in the printing industry. Such foreign control will not be prevented unless some of our proposals are carried today.
As a Scottish Member, I am always concerned if we allow negotiations on pension rights and wages and conditions to develop separately in Scotland from England. In the south of England, especially around the London airports, there is high employment. In Scotland, with the exception of Aberdeen airport, the areas surrounding the airports have high unemployment. In areas of high unemployment, the management may say to workers that they are lucky to be working and that they are

not like their colleagues who are unemployed. In fact, their colleagues are not just unemployed but are now longterm unemployed, having been without a job for a year or two years or more. The management could therefore tell the workers that they should be happy to accept a standstill in wages, or indeed a reduction in wages, which has been forced on the workers in some companies in my own constituency. The management may say, "Why worry about decent pensions? You are lucky to be working".
I should like an assurance from the Secretary of State that the pension conditions and the conditions of service of the workers in the privatised BAA, whether at Prestwick, Glasgow or the London airports, will be identical. For that reason, we must continue with central negotiation. There must be central control of the pension schemes and conditions of service. I accept the assurances given by the Secretary of State, but, just as Sir Norman Payne may not be part of the new privatised BAA, the Secretary of State's future in the Government is even more insecure.

Mr. Peter Snape: Tenuous.

Mr. Lambie: We have accepted the assurances of Ministers and Under-Secretaries in Committee and on Report, but often when we go home and listen to the television news we discover that the Minister has been replaced. The former Minister can then say that he did not given any assurances.
I ask the Secretary of State to give me an assurance that the conditions of the present workers in the CAA will be identical to those of the workers in the BAA. Will central negotiation be continued to ensure that wages and pension rights in the Scottish airports are identical to those in the London airports?

Mr. Ridley: I shall answer briefly, as I think it is wrong for me to have intervened three times already in the debate. I should clear up what I said to the hon. Member for Linlithgow (Mr. Dalyell).
The substance of my reply was correct, that the pensions of the BAA employees are protected. It momentarily slipped my mind that Edinburgh airport is not a local authority airport but a BAA airport. What I said about the pensions of BAA employees applies to the earlier speech that I made on the subject. The pensions of the employees will be as safeguarded in the future as they are at present—indeed, as all other pension funds have been.
The hon. Member for Coventry, North-East (Mr. Park) and, to some extent, the hon. Member for Cunninghame, South (Mr. Lambie) have asked the Government to write into statute some form of guarantee about the wages and conditions of airport workers. I am sure that, on reflection, they will believe that we should not do that. It has not been done for any other group of workers in any other industry. If we were to embark on the course of writing into statute what the wages and pensions should be, not only would we frustrate collective bargaining but there would be fixed wages and conditions for all time without any possibility of future improvement.
I cannot give the hon. Member for Cunninghame, South an undertaking that the wages, terms and conditions and pensions of those who work for the CAA airports, the BAA airports, and local authority airports will necessarily


be the same or will be underwritten by statute. Wages can vary between different employers, different parts of the country and different industries. To deny the possibility of wages varying would be to deny to some people the possibility of improving their standard of living. I am sure that that is not what the hon. Gentleman wants, and that is not what we want. We should leave it to the market to determine wages.

Mr. Robert Hughes: With the leave of the House.
I do not think I have heard such a specious argument in the 15½ years that I have been a Member of the House. To argue that the new clauses, which seek to guarantee existing pay and conditions, are an infringement of bargaining rights is complete nonsense.
The Secretary of State is saying that the employer should have the right to bargain wages down but that employees or trade unions should not have the right to bargain wages up. There is nothing in the new clauses which says that the present pay and conditions are to be frozen for all time. We would encourage the growth of the airport business and hope that there would be opportunities for better pay and conditions. That is not the problem. I am satisfied that an attempt will be made to drive wages down. The new owners of the BAA will have in mind what the Chancellor said during his Budget speech.
If the Secretary of State gets his way, local authority airports will not remain in local authority ownership for all time. If the Bill has any effect, an attempt will be made to move local authority-controlled airports into a second stage—the private sector.
The Chancellor of the Exchequer constantly bemoans, as every Minister does, the level of wages in industry generally. Indeed, he has gone so far as to say that high wage levels are the Achilles heel of the British economy. If that is not an invitation, encouragement, or even a direction for those in private industry to seek to drive down wages, I do not know what is.
There is a clear division between us. We want to see pay, conditions and pensions, which have been negotiated by responsible trade unions with responsible employers, kept as they are with no possibility of their being downgraded.
The Secretary of State says that that has never been done for any company or industry which has been privatised or for any public industries. The fact that it is novel does not mean that it is wrong. It does not put workers in a privileged position. It gives them rights which they should enjoy. The guarantees that the Secretary of State gives about the BAA and local authority ownership apply only so long as they are not private companies and in the market place. The right hon. Gentleman is well known as an advocate of market forces. We know that he dislikes the present level of pay and conditions, and part of the objective would be to try to drive those down.
I shall not ask my right hon. and hon. Friends to vote against new clause 1. It is a concession. It is a recognition that what we are saying might well happen. The fact that the Secretary of State is taking the power to provide for compensation shows that he recognises that that could be a reality. Therefore, I accept new clause 1, but I shall seek to divide the House on new clause 4.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

RESTRICTIONS ON SHARE OWNERSHIP

'From the date of enactment of this Act, the following restrictions on purchase and ownership shall apply to the company to which the property, rights and liability of the BAA are transferred, to that company's subsidiaries, and to any company formed by a principal council to carry on the business of a local authority airport undertaking or any activities incidental to or connected with carrying on that business:

(a) no foreign company shall be eligible to purchase or own shares;
(b) no airline operator shall be eligible to purchase or own shares;
(c) no individual shareholder, organisation or company shall be eligible to purchase or own more than 2 per cent. of the total shares.'—[Mr. Snape.]

Brought up, and read the First time.

Mr. Snape: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to take new clause 11—Airline share ownership by foreign governments or corporations—

'(1) Notwithstanding any provision to the contrary, the directors of the successor company shall be entitled to refuse to register the transfer of any shares in the successor company if

(i) at any time within five years from the date upon which the successor company ceases to be wholly owned by the Crown the total number of shares held by any person in the successor company would exceed fifteen per cent. of the total issued share capital of the successor company which carried the right to vote at general meetings.
(ii) the total number of such shares in the successor company held by airlines would exceed fifteen per cent. of the total issued share capital; or if the total number of such shares held by any one airline would exceed five per cent. of the total issued share capital.
(iii) any shares would be held by a foreign government of any corporation controlled either directly or indirectly by a foreign government.

and the provisions of this section shall extend to any nominee acting for any person.

(2) For the purpose of this section "airline" shall mean an undertaking whose business includes the carriage by air of passengers or cargo for hire or reward and the holding company of any such airline if the business of the airline exceeds twenty per cent. of the turnover of the holding company in the financial year ending immediately prior to the date upon which the transfer of shares is presented for registration.

(3) The Directors shall be entitled to call upon any transferee of shares in the successor company to provide satisfactory proof that none of the limitations in subsection (1) would be exceeded before any share transfer is registered.'.

Mr. Snape: I should have thought that new clause 3, above any, would be guaranteed to strike a responsive chord among Conservative Members. As I am sure the hon. Member for Hertfordshire, South-West (Mr. Page) would agree, new clause 3 is about a healthy form of patriotism. The Conservative party always seeks to wrap itself in the flag of patriotism, no matter what issue we are talking about, and here they have an opportunity to vote for a new clause that is designed to protect, and aimed specifically at protecting, Britain's interests. The Opposition usually speak for Britain but the Government only talk about it while they are busy selling out. But here we give them an opportunity to make up for all the evil things that they have done for Britain over the past seven years by standing up and defending British interests. New clause 3 seeks to restrict foreign ownership of our airports for commercial as well as strategic reasons.
The House will be aware that the London airport system in particular is in active competition with the European


airports of Amsterdam, Paris and Frankfurt, all of which have undertaken aggressive marketing campaigns and all of which are strongly supported by their Governments and national airlines. New clause 3 suggests that we in Britain should do the same, particularly for Heathrow. We should protect our interests in the future of our aviation industry. We invite the Conservative party to join us in going down that historic road.
Over the years, the BAA has been one of Britain's major foreign currency earners and has consistently reinvested its profits in new facilities that have brought widespread benefits to the British economy. We fear that if the new clause is not accepted and foreign operators decide to take a strategic stake in a privatised BAA, they could use that to stifle developments in London so as to enhance their own position. [Interruption.] I hope that the hon. Member for Hertfordshire, South-West, who is amusing his colleagues—although there is nothing particularly funny about what we are discussing—by reading a brief, a copy of which he has received, as I have too, will, when he comes to speak on new clause 11 which is linked with new clause 3, make the same points. If he likes, he can use his own words. I hope that he will accept that I do not need to concentrate exclusively on reading a brief to make a point in the House and if the hon. Gentleman wants to use his own words in supporting our position on new clause 3, we shall be delighted. He can carry some of his hon. Friends with him, especially the hon. Member for Lancaster (Mrs. Kellett-Bowman), whose dulcet tones frequently entertain the House. We do not doubt her patriotism for a moment. I know that she will be more than tempted to support this.

Mr. George Foulkes: Strident tones.

Mr. Snape: Let us not be too ungallant. Dulcet tones will do. We shall expect to see the hon. Lady in the Opposition Lobby defending British interests, particularly on the day of a vital by-election, although the Airports Bill is unlikely to be a major topic of conversation in Fulham. But then we do not need any further topics because the argument is about who will be in second place.
I hope that the House will recognise the strategic importance of the major international asset that we have at Heathrow and will prevent unfriendly Governments, or perhaps merely competitive Governments, from interfering in Britain's key economic decisions in the aviation world.
I recently visited the west country. The importance of Britain's international air links to the provinces, to Plymouth and to areas such as my own in the west midlands, should be apparent to all hon. Members. It is obviously an attraction for companies that wish to invest in Britain if, by merely making one change at Heathrow, they can then fly on to areas such as Manchester, Birmingham or Plymouth. The benefit of that interlinking is enormous for the regional economy.
But let me caution the Conservative party on new clause 3. If it opposes it it should reflect that it may well be endangering interlinking through Heathrow airport and may be further endangering the economy of Britain's provinces, particularly if it allows foreign operators to take shares in a privatised BAA and then to use that influence,

whether directly or indirectly, to reduce the number of slots at Heathrow which are available now to some of our smaller British airlines.
I know that one or two Conservative Members, for example the hon. Member for South Hams (Mr. Steen) who assiduously represents the interests of one smaller airline, would agree that we should do everything possible to prevent their interests being damaged. I hope that the hon. Member for South Hams will agree with me. I will not be cynical and say that the hon. Gentleman is paid to agree with me; I hope that I will be able to persuade him to agree with me that he acceptance of new clause 3 will safeguard the internal links though Heathrow that the company that the hon. Gentleman represents, and the provinces in general, greatly value. I hope that the hon. Gentleman and those of his hon. Friends who are concerned for the future of our air links to the provinces through Heathrow will support the new clause.
4.30 pm
The great argument—if one can dignify it by such a description—for privatisation is that it enables ordinary people to own great corporations and to share in their decision-making processes. I hope that I will be forgiven for some cynicism about that. Anyone who has watched the affairs of Westland in recent months will be aware that the view of the small shareholder is scarcely paramount. In new clause 3 we seek properly to write into legislation the theory that the Conservative party nominally embraces—the idea of a shareholding democracy.
We propose to limit individual shareholdings to a maximum of 2 per cent., and so to prevent some of the somewhat odious things that I have outlined coming to pass. A limit of 2 per cent. would genuinely lead to much greater participation by small shareholders in the affairs of a privatised BAA. Such a philosophy should endear it to Government Members, who still affect to believe in a shareholding democracy. That is what they say, but the reality is different. It is 40 years since a Member of a Labour Government stood at the Dispatch Box and said that the Tories only profess to believe in wider shareholding but that what they really believe in, and implement, is monopoly capitalism. That will he the likely outcome of this Bill. That has been the outcome of other privatisation exercises embarked upon by the Government, and that is what new clause 3 seeks to prevent. Conservative Members now have an opportunity to vote for what they have long talked about—genuine participation by small shareholders.
My hon. Friends and I have repeatedly stated our view throughout the discussion of this Bill. We oppose it in principle. However, it is our duty to try to improve any Bill put before the House as much as we can. We believe that new clause 3 would improve the Bill in a way designed to appeal to Conservative consciences, if such a phrase is not a contradiction in terms. If Conservative Members have any conscience left, they should surely support new clause 3.
I hesitate to preach the virtues of Conservatism too loudly—they are hard to find—

Mr. Frank Cook: Another contradiction.

Mr. Snape: Indeed, but my hon. Friend should not be too upset about that. The art of politics for a minority party is to pitch its appeal in such a way that it may fall on


receptive ears. That is what I have tried to do, and I commend new clause 3 to Conservative Back Benchers as heartily as I commend it to my hon. Friends.

Mr. Richard Page: I shall not follow precisely in the footsteps of the hon. Member for West Bromwich, East (Mr. Snape).
I wish to refer to new clause 11, which is grouped with new clause 3. I tabled new clause 11 because I feared that new clause 3 would be ruled out of order on the ground that it seems to be contrary to the edicts in the treaty of Rome. My clause, too, if not exactly breaching the treaty, would come hard up against it. It would certainly be against the spirit of the treaty. However, the clauses give me an opportunity to articulate my concern about possible pressures if there were to be a large shareholding in BAA, and the effect that such a large shareholding could have on the control and management of the newly privatised body.
The figures in new clause 3 are very tightly drawn. The figures in new clause 11 are a little more generous, but they are not intended to be definitive and they are certainly open to adaptation. Before developing the debate on the possible mechanism for providing fair protection that I believe could be added to the Bill, we should record the reasons why we feel such measures are necessary.
I apologise to the hon. member for West Bromwich, East for mildly twitting him about his points on the dangers of foreign ownership. I was worried that he might take all the points that I wanted to make, leaving me with very little to say.

Mr. Snape: I left half the brief for the hon. Gentleman. I knew that otherwise he would have nothing to say on new clause 11.

Mr. Page: And I really believed that I had persuaded the hon. Gentleman to chicken out. I did not realise that he was motivated more by generosity than by being ashamed of his own words.
I believe that airlines could form a group and have a major impact on shareholdings in the BAA. If four or five airlines each put in the equivalent of a jumbo jet, there would be a sizeable impact on the course of action that could be taken by the management. I do not say that they would act for sinister motives; they might have sensible commercial reasons. Nevertheless, there could be a knock-on effect on the fairness with which BAA was run. That could have an effect not only on new airlines wishing to come into the airport but on the consumer.
If I am worrying about a shadow, not a thing of substance, I am sure that my right hon. Friend will quickly tell me. My concern will then evaporate and new clause 11 will be allowed to lapse. However, if my right hon. Friend agrees that my anxiety is justified we must consider how to deal with it. I am not wedded to new clause 11 as the definitive solution to all our problems. It is a vehicle for discussion. Nevertheless, something should be done. I leave my right hon. Friend to consider whether we should use a new clause or merely amend the articles of association to provide some protection or limit. I shall listen with care to what he says about my genuine fears.

Mr. Litherland: I hope that the Government appreciate the common sense both of new clause 3 and of our observations about foreign control of airports. Surely the Government, and especially the Secretary of State, are

aware of the vulnerability of airports throughout the world in view of the recent spate of terrorism. Almost daily we see on our television screens horrific scenes of terrorist activities at airports. That is true not only of the large international airports but of the provincial airports.
It was a sad day for Mancunians when police at our airport were first allocated guns. Obviously, the consequences of terrorism have exercised the minds of those responsible for airport security. I do not know how the arming of our airport police will affect the tourist trade. I am sure that it must affect the decisions of tourists to come to this country on holiday.
The numerous hijackings and planting of bombs on planes or in airports prove that airports are very vulnerable. Airports are of great local and national strategic value. That begs the question whether any unfriendly Government should have a large investment in any of our airport authorities. The safety and security of our airports must take priority, which lends force to the argument that there should not be any foreign ownership of shares in BAA or any other British airport authority.
Foreign ownership could put jobs at risk, because contracts could be awarded to foreign rather than to British companies at the expense of British jobs. Airports are key economic assets, so we should not undertake any action that would be detrimental to their viability and, therefore, not in the interests of the nation.
It could also be detrimental if airline operators held shares. For example, larger operators could set terms that were unacceptable to the smaller airlines, and that could lead to a carve-up at airports—[Interruption.] I said carve-up, but I mean a fiddle. Conservative Members should be used to that.
We are opposed to foreign companies owning shares in British airport authorities. They, together with airport operators, should be excluded from doing so. New clause 3 states:
no individual shareholder, organisation or company shall be eligible to purchase or own more than 2 per cent. of the total shares.
My hon. Friend the Member for West Bromwich, East (Mr. Snape) said that that provision was common sense and met the criteria of Government dogma. I accept that we shall have no success in pleading with this Government to show reason. However, new clause 3 is a commonsense amendment in the British interest, and I hope that the House will accept it.

Mr. James Couchman: I wish immediately to stress that, unlike the hon. Member for West Bromwich, East (Mr. Snape)—that unlikely national standard-bearer—I have no difficulty in speaking in favour of the Bill and the privatisation of the BAA.

Mr. Snape: What an overweight berk. [HON MEMBERS: "Oh!"] Well, the hon. Member for Gillingham (Mr. Couchman) is overweight, is he not? Perhaps he will tell the House why he considers me to be an unlikely standard-bearer. No doubt his military career was rather more glittering than mine, but I certainly left the services with an honourable discharge. What can he say about that?

Mr. Couchman: The hon. Gentleman is very touchy today. I do not think that my diet has very much to do with


new clause 3. I stand absolutely four square behind the principle of the Bill, whereas the hon. Gentleman has declared his total opposition to it.
The Bill will enable the management of BAA plc to be free of the shackles of Whitehall and to bring about a prosperity to the airports that will—

Mr. Stephen Ross: In about a year's time, when BAA has been privatised, perhaps the hon. Gentleman will join me in looking at the salaries of the chairman and directors. I will have a bet with him that if those salaries have not doubled, they will certainly have increased by 50 per cent.

Mr. Couchman: If the salaries of the senior management and directors of BAA increase by that amount, I have no doubt that it will be because they have brought about a prosperity that currently is lacking. Their salaries would be linked to that.
I have no truck with new clause 3, which is clearly aimed at strangling any flotation of BAA. However, I am concerned about the possibility of foreign or airline control—a matter eloquently outlined by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). I am wholly in favour of people's capitalism—the current jargon—but it should be British people's capitalism. Because of the various ramifications of the treaty of Rome—

Mr. Ernie Ross: How many shares does the hon. Gentleman own?

Mr. Couchman: I have no shares at all.
We cannot legislate against the holding of shares in BAA by foreigners because that would be an infringement of the treaty of Rome. That is why new clause 3 is defective, as the Opposition must know by now. I hope that my right hon. Friend the Secretary of State will guarantee that control of BAA will remain in Britain, not just for a short period but for the indefinite future. I hope that he will assure us that steps will be taken, by the purchase or holding of a golden share, to ensure that control remains in Britain.
There is some parallel with other companies that have been privatised. I understand that 60 per cent. of the shareholding in Jaguar is now held in the United States. I do not know what that will mean for the control of Jaguar. I would not wish BAA to go down that path. British airports are public utilities and cannot really be compared with a manufacturing company such as Jaguar. The control of public utilities should remain within Britain for the indefinite future. I hope that my right hon. Friend can give the House that assurance.

Mr. Roger King: After listening to some hon. Members, one would think that the Russian Aeroflot airline could gain control of Heathrow and turn it into a MIG base.

Mr. Snape: Why not?

Mr. King: I suppose that is a possibility, but only if the BAA, the Government and everyone else stand idly by and allow it to happen.
A privatised British airport system with a monopoly in the London area must carefully scrutinise those seeking ownership of the system. Unlike other privatised concerns, it does not have free-standing competitors—at least, not

in the United Kingdom, although competition exists in the airports of Europe. For example, Heathrow and Gatwick face competition from Paris, Amsterdam and Frankfurt.
In theory, many of those airport organisations, through other airlines, could gain access to ownership of the British Airports Authority and use that ownership to ensure that certain policies which were beneficial to them were carried out. I do not, however, think that this would occur without the British Airports Authority knowing about it and taking steps to prevent it.
It could be done by using this clause, but an extraordinary amount of policing would he required to monitor 2 per cent. shareholdings, and the directors of the British Airports Authority would spend almost every moment of their working day trying to find out who owned the authority, leaving them very little time to run the organisation, in order to comply with the new clause.

Mr. Nicholas Fairbairn: I pass through the airports of this country quite frequently and rarely find a servant of the authority who is Anglo-Saxon, or even a Scot. They all speak broken English. If the present monopoly is able to employ almost exclusively those who are not of British extraction, what is the problem?

Mr. King: I thank my hon. and leaned Friend for that contribution. I would prefer to leave the question unanswered, except to say that I have noticed that the management side could perhaps benefit from some contribution from the ethnic minorities, just to bring some balance to the organisation. What my hon. and learned Friend says is perfectly true. The ethnic minorities have a very strong work presence—certainly at Heathrow. I am not so sure whether that matters in Scotland. British airports are major employers and are to be congratulated on that. We look forward to the creation of many more jobs for all sections of the community.
To go back to what I was saying, to control the ownership of our airports and to provide safeguards, I should like to see provisions in the articles of association of the company similar to those for British Aerospace, British Telecom and Britoil, and such as will exist for British Gas. The Minister must make it clear when he replies to this part of the debate what type of restrictions and wording, if any, the Government would like to see in the articles of association to ensure that the British Airports Authority remains largely in the ownership of the British people.

Mr. Stephen Ross: The hon. Member for Birmingham, Northfield (Mr. King) mentioned at the end of his speech what we want to hear from the Minister. We want to know what provision will be made for workers' share opportunities in the privatisation of the British Airports Authority, if this has to go through. I totally disagree with privatisation, but if it has to happen at least let the workers have a share in it. Will there be an offer similar to that made to those who work for British Telecom—because that is what we want to hear—and will there be a golden share? The point that was raised was valid. The arguments made in the debate about the acceptability of the clause are quite valid too. The country will want to have assurances about these matters.
I realise that the Bill still has some way to go through the other place, and it may be that Government have not


entirely made up their mind. Nevertheless, we are entitled to know here and now what the Government intend to do when they float the British Airports Authority.

Mr. Bill Walker: When he replies to the debate, my hon. Friend the Minister must tell us what the effect of these two new clauses would be. If either or both were accepted, how would it affect a privatised British Airports Authority? How would they affect a privatised authority if it was considering investing in airports in other parts of the world? I imagine that after it is privatised it might develop the kind of expertise that would be marketable in other parts of the world. That being so, it might well wish to invest not only its skill but its funds, so as to increase the profitability of its organisation—something of which we would all approve.

The Parliamentary Under-Secretary of State for Scotland (Mr. Ancram): We have had an interesting debate on what appeared at first sight to be a fairly simple and straightforward new clause. We have learnt about the travelling habits of my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) and about the military distinction of the hon. Member for West Bromwich, East (Mr. Snape). We are in a sense facing two new clauses which are similar in intent but distinguishable in the way in which they try to achieve their purpose.
New clause 3 aims to restrict the ownership of shares in the British Airports Authority's successor company, its subsidiaries established as part of the restructuring arrangements in clause 1 of the Bill, or in airport companies formed by local authorities. New clause 11 places somewhat more limited restrictions on shareholding in the BAA's successor company.
The hon. Member for West Bromwich, East, rather to the surprise of his supporters—as he would have seen had he been able to look over his shoulder—put forward patriotism as the reason for this new clause. Members on the Government Benches always welcome any indication of patriotism from members of the Opposition.

Mr. Frank Cook: I seek your guidance, Mr. Deputy Speaker. It may be a historical reference, but is it not true to say that it has always been the working classes of this country that have risen promptly to defend the flag, and not members of the party in government?

Mr. Ancram: I am tempted to say, Mr. Deputy Speaker, that they protest too much. I was merely complimenting the hon. Member on putting forward the argument of patriotism. I thought that the argument put forward by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) was more realistic. He dealt with the problems that might arise rather than drawing the dark and dramatic picture with which the hon. Member for West Bromwich, East tried to justify his new clause.
I do not consider that the significant restrictions on the ownership of shares in airport companies, proposed by both new clauses in different ways, are necessary, because the Bill itself provides a series of safeguards against undesirable action taken by an airport company, control of which has been acquired by a particular shareholder or class of shareholder. I believe that my hon. Friend the Member for Birmingham, Northfield (Mr. King) in a sense, suggested that these controls were available and that we should look at them again. I would like to go through

some of them now. I do not apologise to the House for taking time to do so because it is important that hon. Members are aware of the existing safeguards.
For instance, the Civil Aviation Authority, as airport regulator, has powers under clause 38 of the Bill to prevent any trading practice or pricing policy which unreasonably discriminates against any class of user, or particular users, of an airport, or which unfairly exploits the airport's bargaining position—for instance, in setting the general level of charges. These powers could be used if an airline gained a degree of control over an airport company and sought to charge its own aircraft at more favourable rates than those of competing airlines, for instance, or unreasonably discriminated over the provision of services and facilities to airlines using the airport.
The CAA also has powers to prevent predatory pricing. At the designated airports, which will comprise the BAA's three London airports and Manchester, the CAA will be required to set limits on airport charges. The Monopolies and Mergers Commission will review all aspects of the airport business every five years. In addition, there are safeguards to prevent discrimination over access to an airport. Airports which hold public use licences issued by the CAA must not allow discrimination over access. Clause 32 of the Bill ensures that the CAA can require an airport to hold a public use licence. This power is further reinforced by clause 27, which ensures that the Secretary of State can direct an airport to comply with our international obligations, including those in respect of non-discrimination over access to airports.
Safety will continue to be regulated by the CAA through the aerodrome licensing system. The Department of Transport will continue to regulate security, issuing directions to airports where necessary, under the Aviation Security Act 1982. In the event of war or emergency, the Government have wide-ranging powers under the Civil Aviation Act 1982. It is, therefore, very difficult to see what benefit could be gained by an individual or company seeking to make a substantial investment in an airport company, other than the normal commercial benefit of investment in a profitable venture.
5 pm
There are other safeguards as well. There are the safeguards of the Fair Trading Act 1973, ensuring that there can be a reference to the Monopolies and Mergers Commission if a shareholder proposes to acquire enough shares to be in a position materially to influence policy or to gain effective control. If the proposed acquisition is judged by the MMC as being against the public interest—several of my hon. Friends raised hypotheses about this—the Secretary of State for Trade and Industry has powers to prevent it. This provides yet a further safeguard against the purchase of shares for use in a manner which is detrimental to the interests of airports or their users.
My hon. Friend the Member for Hertfordshire, South-West and others of my hon. Friends foresaw serious practical problems about some of the restrictions proposed by both new clauses. The proposed restriction on foreign ownership would contravene our obligations under the treaty of Rome and would therefore seem to be ruled out.
Furthermore, a restriction on the size of any shareholding to 2 per cent. of the shares, as proposed by new clause 3, would be absurdly low. It could prevent the establishment of a market in the shares and would probably


contravene the European Community admissions directive, applied by the Stock Exchange (Listing) Regulations 1984, which requires shares to be "freely negotiable". Any such general restrictions on the size of shareholdings, including the 15 per cent. restriction proposed in new clause 11, would also have the serious disadvantage of making the companies "bid-proof", removing a clear incentive for efficiency by removing any threat of takeover. Therefore, it appears that the protection which my hon. Friends want is in place in any event either within the Bill or within existing legislation. Indeed, the new clauses themselves would contravene certain of our obligations within the European Community.
I have listened carefully to the points made by my hon. Friends and in particular to the concern that it might just be possible for an airline controlling an airport to disadvantage other airlines in some subtle way, perhaps by pursuing investment policies which were not in the broader interests of United Kingdom aviation. So, while I consider that it would be a belt and braces approach, we are prepared to examine an appropriate restriction on shareholdings in BAA's successor company to meet the concern. If, on examination, we decide that this is warranted, we do not propose to write it into the Bill. Any such restriction would be written into the articles of association of the BAA's successor company, an effective mechanism which has been used in other privatisations and which is understood and accepted by investors.
If we go by that route, something which we wish to consider on examination, it would probably involve a golden share, about which the hon. Member for the Isle of Wight (Mr. Ross) asked. In those circumstances we would not want to give local authority airports less freedom than the BAA to introduce such restrictions, if they were considered desirable. We shall examine clause 24 and, if necessary after consideration, we shall bring forward an amendment in another place.
In the light of what I have said, I hope that my hon. Friend the Member for Hertfordshire, South-West and the hon. Member for West Bromwich, East will withdraw their new clauses.

Mr. Snape: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. Gentleman wish to have the leave of the House to speak again?

Mr. Snape: I do, Mr. Deputy Speaker.

Mr. Deputy Speaker: Does the hon. Gentleman have the leave of the House to speak again?

Hon. Members: Yes.

Mr. Snape: What the hon. Member for Edinburgh, South (Mr. Ancram) has just said is of some significance in the debate. However, I wish that he had been more clear about the Government's intentions. We have obviously worried the hon. Gentleman. I cannot claim any personal credit for the expression of worry that has flitted across the Minister's face, but the concern that has been expressed on both sides of the House during the short debate has caused some worry within the ministerial ranks.
So that we may decide whether that concern is sufficient, let us examine the proposals that have been put forward and the hon. Gentleman's reactions to them. It is

a strange Conservative party which says, "We cannot do anything to defend British interests because it might be contrary to the treaty of Rome." I do not know whether the new clause in my name and the names of my hon. Friends is contrary to the treaty of Rome, but, to be honest, I do not much care whether it is. I make no apology for that.
If I am, in the words of the hon. Member for Gillingham (Mr. Couchman), an unlikely standard bearer, in many ways he is an unlikely Tory. [Interruption.] I merely ask where he gets his patriotism from. When I looked at his track record, I noticed that he joined the family company in 1970. I congratulate him on being an achiever, if for no other reason than that within a very short time he became chairman and then a director of the company, so he is an unlikely standard bearer for British interests when we compare his track record with those of my hon. Friends. We make no apology for defending the interests of British aviation.

Mrs. Edwina Currie: Cheap. That is not worthy of the hon. Gentleman.

Mr. Snape: The hon. Lady has just joined us. It would be out of character for her to keep her mouth shut for longer than 30 seconds. The hon. Lady said, "Cheap." Whether she was imitating a budgerigar or participating in the debate I shall leave her to judge, but I do not think it is cheap to defend the interests of the last prosperous industry in Britain or to defend the patriotism of my hon. Friends. We get sick of being lectured on patriotism by a party that is anxious to parcel up and sell to anyone anywhere in the world any profitable sector of British industry. If it is patriotism to resist such conduct by the worst Government that this country has ever seen, we plead guilty to being patriots and are proud to do so.
We want to know more than the Under-Secretary of State has implied. He said that the Government might retain a golden share in a privatised BAA because of the likely impact of foreign ownership on the policies to be pursued by a particular BAA airport. The hon. Gentleman will know that, despite all the safeguards he has outlined, references to the Monopolies and Mergers Commission through the Office of Fair Trading are infrequent and difficult to come by. We are concerned that damage might be done to British aviation interests while the question whether a practice was fair was being considered.
A foreign airline or a large company which has a major or significant shareholding in a privatised BAA will not advertise the fact that it is seeking to influence the policy to be followed by a privatised airport. It will be done much more subtly, as the Conservative party knows. Regretfully, I cannot accept the Minister's assurances. He will have to come up with something more definite.
With regard to shareholding, the hon. Member for Hertfordshire, South-West (Mr. Page) said that he was not too bothered about upholding the figure of 15 per cent. referred to in his amendment. Again, to show how anxious we are to reach agreement, we shall not hold him to the 2 per cent. either. We feel that a limit must be laid down to the number of shares that can be held.
To say that the imposition of such a limit would reduce efficiency because it would prevent a future takeover is a laughable interpretation, and if we are talking about laughable interpretations, we have just the man for the job sitting on the Front Bench, in the person of the right hon. Gentleman the Secretary of State for Transport. It is a


doctrine that I have never heard expounded by any chairman of any major company—that a firm is more efficient because it fears a takeover. We are normally told how efficient companies have been, regardless of attempts by their competitors to gobble them up. So we feel that a limitation on shareholding is necessary.
Mention was made during the debate of British Telecom. There is an example for all of us, even Conservative Members, to learn from. There are more British Telecom shareholders in Tokyo than there are in West Bromwich or, for that matter, in Birmingham, Northfield. I know that the hon. Member for Birmingham, Northfield (Mr. King) is not a shareholder, and I hope he will take it from me that more British Telecom shares are held in Tokyo than are held in his own constituency. Is that the sort of patriotism that the hon. Member for Gillingham professes to defend?
We insist on a shareholding limit, whatever it is—not necessarily the 2 per cent., or the 15 per cent. which the hon. Member for Hertfordshire, South-West indicated, but certainly some limitation, if only to protect the future policies of these privatised airports and to defend the future interests of British aviation.
For those reasons alone, I hope that despite, shall I say, the arguments that I have marshalled the Conservative party will for once stop talking about patriotism and vote for it.

Mr. Richard Page: rose—

Mr. Deputy Speaker: Does the hon. Member have the leave of the House to speak again?

Hon. Members: Yes.

Mr. Page: With the leave of the House, I shall take only a few minutes to respond, with a slight contrast in style, to the Minister's speech. I thank him for listening to the concerns expressed on both sides of the House. I am glad that he is to look at the matter again. I believe that the whole House will be glad to know that this issue will be given a second going over and that, if necessary, the golden share will be introduced.

Question put, That the clause be read a Second time:—

The House divided: Ayes 168, Noes 301.

Division No. 125]



[5.12 pm



AYES


Adams, Allen (Paisley N)
Campbell, Ian


Alton, David
Campbell-Savours, Dale


Ashdown, Paddy
Canavan, Dennis


Ashley, Rt Hon Jack
Carlile, Alexander (Montg'y)


Ashton, Joe
Carter-Jones, Lewis


Atkinson, N. (Tottenham)
Cartwright, John


Bagier, Gordon A. T.
Clarke, Thomas


Barnett, Guy
Clay, Robert


Beckett, Mrs Margaret
Clelland, David Gordon


Bennett, A. (Dent'n &amp; Red'sh)
Clwyd, Mrs Ann


Bermingham, Gerald
Cocks, Rt Hon M. (Bristol S)


Bidwell, Sydney
Cook, Frank (Stockton North)


Blair, Anthony
Cook, Robin F. (Livingston)


Boyes, Roland
Corbett, Robin


Bray, Dr Jeremy
Corbyn, Jeremy


Brown, Gordon (D'f'mline E)
Craigen, J. M.


Brown, Hugh D. (Provan)
Cunningham, Dr John


Brown, N. (N'c'tle-u-Tyne E)
Dalyell, Tam


Brown, R. (N'c'tle-u-Tyne N)
Davies, Ronald (Caerphilly)


Brown, Ron (E'burgh, Leith)
Davis, Terry (B'ham, H'ge H'l)


Bruce, Malcolm
Deakins, Eric


Buchan, Norman
Dewar, Donald


Caborn, Richard
Dixon, Donald


Callaghan, Rt Hon J.
Dormand, Jack


Callaghan, Jim (Heyw'd &amp; M)
Douglas, Dick





Dubs, Alfred
Mason, Rt Hon Roy


Duffy, A. E. P.
Maxton, John


Eastham, Ken
Maynard, Miss Joan


Edwards, Bob (W'h'mpt'n SE)
Meacher, Michael


Evans, John (St. Helens N)
Michie, William


Ewing, Harry
Miller, Dr M. S. (E Kilbride)


Fatchett, Derek
Mitchell, Austin (G't Grimsby)


Faulds, Andrew
Morris, Rt Hon A. (W'shawe)


Field, Frank (Birkenhead)
Morris, Rt Hon J. (Aberavon)


Fields, T. (L'pool Broad Gn)
Nellist, David


Fisher, Mark
Orme, Rt Hon Stanley


Flannery, Martin
Park, George


Foot, Rt Hon Michael
Parry, Robert


Forrester, John
Patchett, Terry


Foster, Derek
Pavitt, Laurie


Foulkes, George
Pendry, Tom


Fraser, J. (Norwood)
Penhaligon, David


Freeson, Rt Hon Reginald
Pike, Peter


George, Bruce
Prescott, John


Gilbert, Rt Hon Dr John
Radice, Giles


Godman, Dr Norman
Randall, Stuart


Golding, John
Redmond, Martin


Gould, Bryan
Rees, Rt Hon M. (Leeds S)


Gourlay, Harry
Richardson, Ms Jo


Hamilton, James (M'well N)
Roberts, Allan (Bootle)


Hamilton, W. W. (Fife Central)
Robertson, George


Harrison, Rt Hon Walter
Rooker, J. W.


Hattersley, Rt Hon Roy
Ross, Ernest (Dundee W)


Healey, Rt Hon Denis
Ross, Stephen (Isle of Wight)


Hogg, N. (C'nauld &amp; Kilsyth)
Sedgemore, Brian


Home Robertson, John
Sheldon, Rt Hon R.


Howells, Geraint
Shore, Rt Hon Peter


Hughes, Dr Mark (Durham)
Short, Ms Clare (Ladywood)


Hughes, Robert (Aberdeen N)
Short, Mrs R.(W'hampt'n NE)


Hughes, Roy (Newport East)
Silkin, Rt Hon J.


Hughes, Sean (Knowsley S)
Skinner, Dennis


John, Brynmor
Smith, Rt Hon J. (M'ds E)


Jones, Barry (Alyn &amp; Deeside)
Snape, Peter


Kaufman, Rt Hon Gerald
Stott, Roger


Kennedy, Charles
Strang, Gavin


Kilroy-Silk, Robert
Straw, Jack


Kinnock, Rt Hon Neil
Thomas, Dafydd (Merioneth)


Kirkwood, Archy
Thomas, Dr R. (Carmarthen)


Lambie, David
Thompson, J. (Wansbeck)


Lamond, James
Thorne, Stan (Preston)


Leighton, Ronald
Tinn, James


Lewis, Terence (Worsley)
Torney, Tom


Litherland, Robert
Wainwright, R.


Livsey, Richard
Wallace, James


Lloyd, Tony (Stretford)
Wardell, Gareth (Gower)


Loyden, Edward
Wareing, Robert


McCartney, Hugh
Weetch, Ken


McKay, Allen (Penistone)
White, James


McKelvey, William
Williams, Rt Hon A.


McNamara, Kevin
Wilson, Gordon


McTaggart, Robert
Winnick, David


McWilliam, John
Young, David (Bolton SE)


Madden, Max



Marek, Dr John
Tellers for the Ayes:


Marshall, David (Shettleston)
Mr. Frank Haynes and


Martin, Michael
Mr. Ray Powell.

NOES


Adley, Robert
Bendall, Vivian


Alexander, Richard
Bennett, Rt Hon Sir Frederic


Alison, Rt Hon Michael
Benyon, William


Amess, David
Best, Keith


Ancram, Michael
Bevan, David Gilroy


Arnold, Tom
Biffen, Rt Hon John


Ashby, David
Biggs-Davison, Sir John


Aspinwall, Jack
Blaker, Rt Hon Sir Peter


Atkins, Rt Hon Sir H.
Bonsor, Sir Nicholas


Atkins, Robert (South Ribble)
Bottomley, Mrs Virginia


Atkinson, David (B'm'th E)
Bowden, A. (Brighton K'to'n)


Baker, Rt Hon K. (Mole Vall'y)
Bowden, Gerald (Dulwich)


Baker, Nicholas (Dorset N)
Brandon-Bravo, Martin


Baldry, Tony
Brinton, Tim


Batiste, Spencer
Brittan, Rt Hon Leon


Beaumont-Dark, Anthony
Brooke, Hon Peter


Bellingham, Henry
Browne, John






Bruinvels, Peter
Hawkins, C. (High Peak)


Bryan, Sir Paul
Hawksley, Warren


Buchanan-Smith, Rt Hon A.
Hayes, J.


Buck, Sir Antony
Hayhoe, Rt Hon Barney


Budgen, Nick
Heathcoat-Amory, David


Bulmer, Esmond
Heddle, John


Burt, Alistair
Henderson, Barry


Butcher, John
Hickmet, Richard


Butler, Rt Hon Sir Adam
Hicks, Robert


Butterfill, John
Higgins, Rt Hon Terence L.


Carlisle, John (Luton N)
Hill, James


Carlisle, Kenneth (Lincoln)
Hind, Kenneth


Carttiss, Michael
Hogg, Hon Douglas (Gr'th'm)


Cash, William
Holland, Sir Philip (Gedling)


Chalker, Mrs Lynda
Holt, Richard


Channon, Rt Hon Paul
Hordern, Sir Peter


Chapman, Sydney
Howard, Michael


Chope, Christopher
Howarth, Alan (Stratf'd-on-A)


Churchill, W. S.
Howarth, Gerald (Cannock)


Clark, Hon A. (Plym'th S'n)
Howell, Rt Hon D. (G'ldford)


Clark, Sir W. (Croydon S)
Howell, Ralph (Norfolk, N)


Clarke, Rt Hon K. (Rushcliffe)
Hubbard-Miles, Peter


Cockeram, Eric
Hunter, Andrew


Colvin, Michael
Irving, Charles


Conway, Derek
Jackson, Robert


Coombs, Simon
Jenkin, Rt Hon Patrick


Cope, John
Jessel, Toby


Couchman, James
Jones, Gwilym (Cardiff N)


Cranborne, Viscount
Jones, Robert (Herts W)


Currie, Mrs Edwina
Joseph, Rt Hon Sir Keith


Dickens, Geoffrey
Kellett-Bowman, Mrs Elaine


Dicks, Terry
King, Roger (B'ham N'field)


Douglas-Hamilton, Lord J.
King, Rt Hon Tom


Dover, Den
Knight, Greg (Derby N)


du Cann, Rt Hon Sir Edward
Knight, Dame Jill (Edgbaston)


Dunn, Robert
Knowles, Michael


Durant, Tony
Knox, David


Dykes, Hugh
Lamont, Norman


Eggar, Tim
Lang, Ian


Eyre, Sir Reginald
Latham, Michael


Fairbairn, Nicholas
Lawler, Geoffrey


Fallon, Michael
Lee, John (Pendle)


Farr, Sir John
Leigh, Edward (Gainsbor'gh)


Favell, Anthony
Lennox-Boyd, Hon Mark


Fenner, Mrs Peggy
Lewis, Sir Kenneth (Stamf'd)


Finsberg, Sir Geoffrey
Lightbown, David


Fletcher, Alexander
Lilley, Peter


Fookes, Miss Janet
Lloyd, Peter (Fareham)


Forth, Eric
Lord, Michael


Fowler, Rt Hon Norman
Luce, Rt Hon Richard


Fox, Marcus
Lyell, Nicholas


Franks, Cecil
McCrindle, Robert


Fraser, Peter (Angus East)
McCurley, Mrs Anna


Freeman, Roger
Macfarlane, Neil


Fry, Peter
MacKay, Andrew (Berkshire)


Galley, Roy
McNair-Wilson, M. (N'bury)


Gardiner, George (Reigate)
McNair-Wilson, P. (New F'st)


Gardner, Sir Edward (Fylde)
Madel, David


Garel-Jones, Tristan
Major, John


Gilmour, Rt Hon Sir Ian
Malins, Humfrey


Goodlad, Alastair
Malone, Gerald


Gow, Ian
Maples, John


Gower, Sir Raymond
Marland, Paul


Grant, Sir Anthony
Marlow, Antony


Greenway, Harry
Mates, Michael


Gregory, Conal
Maude, Hon Francis


Griffiths, Sir Eldon
Mawhinney, Dr Brian


Griffiths, Peter (Portsm'th N)
Maxwell-Hyslop, Robin


Grist, Ian
Mayhew, Sir Patrick


Ground, Patrick
Mellor, David


Grylls, Michael
Merchant, Piers


Gummer, Rt Hon John S
Meyer, Sir Anthony


Hamilton, Hon A. (Epsom)
Miller, Hal (B'grove)


Hamilton, Neil (Tatton)
Mills, Iain (Meriden)


Hampson, Dr Keith
Mills, Sir Peter (West Devon)


Hanley, Jeremy
Mitchell, David (Hants NW)


Hannam, John
Monro, Sir Hector


Hargreaves, Kenneth
Montgomery, Sir Fergus


Harris, David
Moore, Rt Hon John


Haselhurst, Alan
Morrison, Hon C. (Devizes)





Morrison, Hon P. (Chester)
Stanley, Rt Hon John


Moynihan, Hon C.
Steen, Anthony


Mudd, David
Stern, Michael


Neale, Gerrard
Stevens, Lewis (Nuneaton)


Nelson, Anthony
Stewart, Allan (Eastwood)


Neubert, Michael
Stewart, Andrew (Sherwood)


Nicholls, Patrick
Stewart, Ian (Hertf'dshire N)


Norris, Steven
Stokes, John


Oppenheim, Phillip
Sumberg, David


Oppenheim, Rt Hon Mrs S.
Tapsell, Sir Peter


Ottaway, Richard
Taylor, John (Solihull)


Page, Richard (Herts SW)
Taylor, Teddy (S'end E)


Parris, Matthew
Tebbit, Rt Hon Norman


Pawsey, James
Temple-Morris, Peter


Peacock, Mrs Elizabeth
Terlezki, Stefan


Percival, Rt Hon Sir Ian
Thatcher, Rt Hon Mrs M.


Pollock, Alexander
Thompson, Donald (Calder V)


Powell, William (Corby)
Thompson, Patrick (N'ich N)


Powley, John
Thorne, Neil (Ilford S)


Prentice, Rt Hon Reg
Thornton, Malcolm


Price, Sir David
Thurnham, Peter


Proctor, K. Harvey
Townend, John (Bridlington)


Pym, Rt Hon Francis
Townsend, Cyril D. (B'heath)


Raffan, Keith
Trippier, David


Rathbone, Tim
Trotter, Neville


Rees, Rt Hon Peter (Dover)
Twinn, Dr Ian


Renton, Tim
van Straubenzee, Sir W.


Rhodes James, Robert
Vaughan, Sir Gerard


Rhys Williams, Sir Brandon
Viggers, Peter


Ridley, Rt Hon Nicholas
Waddington, David


Roberts, Wyn (Conwy)
Wakeham, Rt Hon John


Robinson, Mark (N'port W)
Waldegrave, Hon William


Roe, Mrs Marion
Walden, George


Rossi, Sir Hugh
Walker, Bill (T'side N)


Rowe, Andrew
Wall, Sir Patrick


Rumbold, Mrs Angela
Walters, Dennis


Ryder, Richard
Ward, John


Sackville, Hon Thomas
Wardle, C. (Bexhill)


Sainsbury, Hon Timothy
Warren, Kenneth


Scott, Nicholas
Watts, John


Shaw, Sir Michael (Scarb')
Wheeler, John


Shelton, William (Streatham)
Whitfield, John


Shepherd, Colin (Hereford)
Whitney, Raymond


Shepherd, Richard (Aldridge)
Wiggin, Jerry


Shersby, Michael
Wilkinson, John


Silvester, Fred
Wolfson, Mark


Sims, Roger
Wood, Timothy


Skeet, Sir Trevor
Woodcock, Michael


Smith, Tim (Beaconsfield)
Yeo, Tim


Soames, Hon Nicholas
Young, Sir George (Acton)


Speed, Keith
Younger, Rt Hon George


Spencer, Derek



Spicer, Jim (Dorset W)
Tellers for the Noes:


Spicer, Michael (S Worcs)
Mr. Carol Mather and


Squire, Robin
Mr. Robert Boscawen.


Stanbrook, Ivor

Question accordingly negatived.

New Clause 4

SUPERANNUATION AND PENSION RIGHTS

'(1) No change shall be made to the structure, provisions or coverage of the BAA superannuation scheme without the members of the BAA Central Negotiating Committee.

(2) No scheme providing for the transfer to a company of the business of operating a local authority undertaking or any activities incidental to or connected with carrying on that business shall be approved by the Secretary of State unless it provides for the establishment by the principal council of a body to administer the pension funds of such a company.'.—[Mr. Snape]

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

The House divided: Ayes 168, Noes 301.

Division No. 126]
[5.24 pm


AYES


Adams, Allen (Paisley N)
Hattersley, Rt Hon Roy


Alton, David
Healey, Rt Hon Denis


Ashdown, Paddy
Hogg, N. (C'nauld &amp; Kilsyth)


Ashley, Rt Hon Jack
Home Robertson, John


Ashton, Joe
Howells, Geraint


Atkinson, N. (Tottenham)
Hughes, Dr Mark (Durham)


Bagier, Gordon A. T.
Hughes, Robert (Aberdeen N)


Barnett, Guy
Hughes, Roy (Newport East)


Beckett, Mrs Margaret
Hughes, Sean (Knowsley S)


Bennett, A. (Dent'n &amp; Red'sh)
John, Brynmor


Bermingham, Gerald
Jones, Barry (Alyn &amp; Deeside)


Bidwell, Sydney
Kaufman, Rt Hon Gerald


Blair, Anthony
Kennedy, Charles


Boyes, Roland
Kilroy-Silk, Robert


Bray, Dr Jeremy
Kinnock, Rt Hon Neil


Brown, Gordon (D'f'mline E)
Kirkwood, Archy


Brown, Hugh D. (Provan)
Lambie, David


Brown, N. (N'c'tle-u-Tyne E)
Lamond, James


Brown, R. (N'c'tle-u-Tyne N)
Leighton, Ronald


Brown, Ron (E'burgh, Leith)
Lewis, Terence (Worsley)


Bruce, Malcolm
Litherland, Robert


Buchan, Norman
Livsey, Richard


Caborn, Richard
Lloyd, Tony (Stretford)


Callaghan, Rt Hon J.
Loyden, Edward


Callaghan, Jim (Heyw'd &amp; M)
McCartney, Hugh


Campbell, Ian
McKay, Allen (Penistone)


Campbell-Savours, Dale
McKelvey, William


Canavan, Dennis
McNamara, Kevin


Carlile, Alexander (Montg'y)
McTaggart, Robert


Carter-Jones, Lewis
McWilliam, John


Cartwright, John
Madden, Max


Clarke, Thomas
Marek, Dr John


Clay, Robert
Marshall, David (Shettleston)


Clelland, David Gordon
Martin, Michael


Clwyd, Mrs Ann
Mason, Rt Hon Roy


Cocks, Rt Hon M. (Bristol S)
Maxton, John


Cohen, Harry
Maynard, Miss Joan


Cook, Frank (Stockton North)
Meacher, Michael


Cook, Robin F. (Livingston)
Michie, William


Corbett, Robin
Miller, Dr M. S. (E Kilbride)


Corbyn, Jeremy
Mitchell, Austin (G't Grimsby)


Craigen, J. M.
Morris, Rt Hon A. (W'shawe)


Cunningham, Dr John
Morris, Rt Hon J. (Aberavon)


Dalyell, Tam
Nellist, David


Davies, Ronald (Caerphilly)
Orme, Rt Hon Stanley


Davis, Terry (B'ham, H'ge H'l)
Park, George


Deakins, Eric
Parry, Robert


Dewar, Donald
Patchett, Terry


Dixon, Donald
Pavitt, Laurie


Dormand, Jack
Pendry, Tom


Douglas, Dick
Penhaligon, David


Dubs, Alfred
Pike, Peter


Duffy, A. E. P.
Prescott, John


Eastham, Ken
Radice, Giles


Edwards, Bob (W'h'mpt'n SE)
Randall, Stuart


Evans, John (St. Helens N)
Redmond, Martin


Ewing, Harry
Rees, Rt Hon M. (Leeds S)


Fatchett, Derek
Richardson, Ms Jo


Faulds, Andrew
Roberts, Allan (Bootle)


Field, Frank (Birkenhead)
Robertson, George


Fields, T. (L'pool Broad Gn)
Rooker, J. W.


Fisher, Mark
Ross, Ernest (Dundee W)


Flannery, Martin
Ross, Stephen (Isle of Wight)


Foot, Rt Hon Michael
Sheldon, Rt Hon R.


Forrester, John
Shore, Rt Hon Peter


Foster, Derek
Short, Ms Clare (Ladywood)


Foulkes, George
Short, Mrs R.(W'hampt'n NE)


Fraser, J. (Norwood)
Silkin, Rt Hon J.


Freeson, Rt Hon Reginald
Skinner, Dennis


George, Bruce
Smith, Rt Hon J. (M'ds E)


Gilbert, Rt Hon Dr John
Snape, Peter


Godman, Dr Norman
Stott, Roger


Golding, John
Strang, Gavin


Gould, Bryan
Straw, Jack


Gourlay, Harry
Thomas, Dafydd (Merioneth)


Hamilton, James (M'well N)
Thomas, Dr R. (Carmarthen)


Hamilton, W. W. (Fife Central)
Thompson, J. (Wansbeck)


Harrison, Rt Hon Walter
Thorne, Stan (Preston)





Tinn, James
Williams, Rt Hon A.


Torney, Tom
Wilson, Gordon


Wainwright, R.
Winnick, David


Wallace, James
Young, David (Bolton SE)


Wardell, Gareth (Gower)



Wareing, Robert
Tellers for the Ayes:


Weetch, Ken
Mr. Frank Haynes and


White, James
Mr. Ray Powell.

NOES


Adley, Robert
Durant, Tony


Alexander, Richard
Dykes, Hugh


Alison, Rt Hon Michael
Eggar, Tim


Amess, David
Eyre, Sir Reginald


Ancram, Michael
Fairbairn, Nicholas


Arnold, Tom
Fallon, Michael


Ashby, David
Farr, Sir John


Aspinwall, Jack
Favell, Anthony


Atkins, Rt Hon Sir H.
Fenner, Mrs Peggy


Atkins, Robert (South Ribble)
Finsberg, Sir Geoffrey


Atkinson, David (B'm'th E)
Fletcher, Alexander


Baker, Rt Hon K. (Mole Vall'y)
Fookes, Miss Janet


Baker, Nicholas (Dorset N)
Forth, Eric


Baldry, Tony
Fowler, Rt Hon Norman


Batiste, Spencer
Fox, Marcus


Beaumont-Dark, Anthony
Franks, Cecil


Bellingham, Henry
Fraser, Peter (Angus East)


Bendall, Vivian
Freeman, Roger


Bennett, Rt Hon Sir Frederic
Fry, Peter


Benyon, William
Galley, Roy


Best, Keith
Gardiner, George (Reigate)


Bevan, David Gilroy
Gardner, Sir Edward (Fylde)


Biffen, Rt Hon John
Garel-Jones, Tristan


Biggs-Davison, Sir John
Gilmour, Rt Hon Sir Ian


Blaker, Rt Hon Sir Peter
Goodlad, Alastair


Bonsor, Sir Nicholas
Gow, Ian


Bottomley, Mrs Virginia
Gower, Sir Raymond


Bowden, A. (Brighton K'to'n)
Grant, Sir Anthony


Bowden, Gerald (Dulwich)
Greenway, Harry


Brandon-Bravo, Martin
Gregory, Conal


Brinton, Tim
Griffiths, Sir Eldon


Brittan, Rt Hon Leon
Griffiths, Peter (Portsm'th N)


Brooke, Hon Peter
Grist, Ian


Browne, John
Ground, Patrick


Bruinvels, Peter
Grylls, Michael


Bryan, Sir Paul
Gummer, Rt Hon John S


Buchanan-Smith, Rt Hon A.
Hamilton, Hon A. (Epsom)


Buck, Sir Antony
Hamilton, Neil (Tatton)


Budgen, Nick
Hampson, Dr Keith


Bulmer, Esmond
Hanley, Jeremy


Burt, Alistair
Hannam, John


Butcher, John
Hargreaves, Kenneth


Butler, Rt Hon Sir Adam
Harris, David


Butterfill, John
Haselhurst, Alan


Carlisle, John (Luton N)
Hawkins, C. (High Peak)


Carlisle, Kenneth (Lincoln)
Hawksley, Warren


Carttiss, Michael
Hayes, J.


Cash, William
Hayhoe, Rt Hon Barney


Chalker, Mrs Lynda
Heathcoat-Amory, David


Channon, Rt Hon Paul
Heddle, John


Chapman, Sydney
Henderson, Barry


Chope, Christopher
Hickmet, Richard


Churchill, W. S.
Hicks, Robert


Clark, Hon A. (Plym'th S'n)
Higgins, Rt Hon Terence L.


Clark, Sir W. (Croydon S)
Hill, James


Clarke, Rt Hon K. (Rushcliffe)
Hind, Kenneth


Cockeram, Eric
Hogg, Hon Douglas (Gr'th'm)


Colvin, Michael
Holland, Sir Philip (Gedling)


Conway, Derek
Holt, Richard


Coombs, Simon
Hordern, Sir Peter


Cope, John
Howard, Michael


Couchman, James
Howarth, Alan (Stratf'd-on-A)


Cranborne, Viscount
Howarth, Gerald (Cannock)


Currie, Mrs Edwina
Howell, Rt Hon D. (G 'ldford)


Dickens, Geoffrey
Howell, Ralph (Norfolk, N)


Dicks, Terry
Hubbard-Miles, Peter


Douglas-Hamilton, Lord J.
Hunter, Andrew


Dover, Den
Irving, Charles


du Cann, Rt Hon Sir Edward
Jackson, Robert


Dunn, Robert
Jenkin, Rt Hon Patrick






Jessel, Toby
Renton, Tim


Jones, Gwilym (Cardiff N)
Rhodes James, Robert


Jones, Robert (Herts W)
Rhys Williams, Sir Brandon


Joseph, Rt Hon Sir Keith
Ridley, Rt Hon Nicholas


Kellett-Bowman, Mrs Elaine
Roberts, Wyn (Conwy)


King, Roger (B'ham N'field)
Robinson, Mark (N'port W)


King, Rt Hon Tom
Roe, Mrs Marion


Knight, Greg (Derby N)
Rossi, Sir Hugh


Knight, Dame Jill (Edgbaston)
Rowe, Andrew


Knowles, Michael
Rumbold, Mrs Angela


Knox, David
Ryder, Richard


Lamont, Norman
Sackville, Hon Thomas


Lang, Ian
Sainsbury, Hon Timothy


Latham, Michael
Scott, Nicholas


Lawler, Geoffrey
Shaw, Sir Michael (Scarb')


Lee, John (Pendle)
Shelton, William (Streatham)


Leigh, Edward (Gainsbor'gh)
Shepherd, Colin (Hereford)


Lennox-Boyd, Hon Mark
Shepherd, Richard (Aldridge)


Lewis, Sir Kenneth (Stamf'd)
Shersby, Michael


Lightbown, David
Silvester, Fred


Lilley, Peter
Sims, Roger


Lloyd, Peter (Fareham)
Skeet, Sir Trevor


Lord, Michael
Smith, Tim (Beaconsfield)


Luce, Rt Hon Richard
Soames, Hon Nicholas


Lyell, Nicholas
Speed, Keith


McCrindle, Robert
Spencer, Derek


McCurley, Mrs Anna
Spicer, Jim (Dorset W)


Macfarlane, Neil
Spicer, Michael (S Worcs)


MacKay, Andrew (Berkshire)
Squire, Robin


McNair-Wilson, M. (N'bury)
Stanbrook, Ivor


McNair-Wilson, P. (New F'st)
Stanley, Rt Hon John


Madel, David
Steen, Anthony


Major, John
Stern, Michael


Malins, Humfrey
Stevens, Lewis (Nuneaton)


Malone, Gerald
Stewart, Allan (Eastwood)


Maples, John
Stewart, Andrew (Sherwood)


Marland, Paul
Stewart, Ian (Hertf'dshire N)


Marlow, Antony
Stokes, John


Mates, Michael
Sumberg, David


Maude, Hon Francis
Tapsell, Sir Peter


Mawhinney, Dr Brian
Taylor, John (Solihull)


Maxwell-Hyslop, Robin
Taylor, Teddy (S'end E)


Mayhew, Sir Patrick
Tebbit, Rt Hon Norman


Mellor, David
Temple-Morris, Peter


Merchant, Piers
Terlezki, Stefan


Meyer, Sir Anthony
Thatcher, Rt Hon Mrs M.


Miller, Hal (B'grove)
Thompson, Donald (Calder V)


Mills, Iain (Meriden)
Thompson, Patrick (N'ich N)


Mills, Sir Peter (West Devon)
Thorne, Neil (Ilford S)


Mitchell, David (Hants NW)
Thornton, Malcolm


Monro, Sir Hector
Thurnham, Peter


Montgomery, Sir Fergus
Townend, John (Bridlington)


Moore, Rt Hon John
Townsend, Cyril D. (B'heath)


Morrison, Hon C. (Deviz[...])
Trippier, David


Morrison, Hon P. (Chester)
Trotter, Neville


Moynihan, Hon C.
Twinn, Dr Ian


Mudd, David
van Straubenzee, Sir W.


Neale, Gerrard
Vaughan, Sir Gerard


Nelson, Anthony
Viggers, Peter


Neubert, Michael
Waddington, David


Nicholls, Patrick
Wakeham, Rt Hon John


Norris, Steven
Waldegrave, Hon William


Oppenheim, Phillip
Walden, George


Oppenheim, Rt Hon Mrs S.
Walker, Bill (T'side N)


Ottaway, Richard
Wall, Sir Patrick


Page, Richard (Herts SW)
Walters, Dennis


Parris, Matthew
Ward, John


Pawsey, James
Wardle, C. (Bexhill)


Peacock, Mrs Elizabeth
Warren, Kenneth


Percival, Rt Hon Sir Ian
Watts, John


Pollock, Alexander
Wheeler, John


Powell, William (Corby)
Whitfield, John


Powley, John
Whitney, Raymond


Prentice, Rt Hon Reg
Wiggin, Jerry


Price, Sir David
Wilkinson, John


Proctor, K. Harvey
Wolfson, Mark


Pym, Rt Hon Francis
Wood, Timothy


Raffan, Keith
Woodcock, Michael


Rathbone, Tim
Yeo, Tim


Rees, Rt Hon Peter (Dover)
Young, Sir George (Acton)





Younger, Rt Hon George
Mr. Carol Mather and



Mr. Robert Boscawen.


Tellers for the Noes:

Question accordingly negatived.

New Clause 6

SCHEDULING COMMITTEE

'(1) At every airport licensed for public use under an Air Navigation Order there shall be a Scheduling Committee consisting of operators of aircraft using that airport for flights for the carriage of passengers or cargo for reward.

(2) Every such operator shall be entitled to be a member of the Scheduling Committee, and shall have one vote in its decisions, which shall be made at a meeting of the Committee by a three-quarters majority of the members present.

(3) Subject to the foregoing, the Scheduling Committee shall determine its own procedure.

(4) Subject to the provisions of section 30 of this Act, the Scheduling Committee shall have the function of allocating the times for the movements of aircraft at the airport, and it shall be the duty of the airport operator to take all necessary measures to give effect to the allocation so made.'.—[Mr. Steen.]

Brought up, and read the First time.

Mr. Anthony Steen: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we may discuss the following amendments: No. 19, in clause 26, page 19, line 14, at end insert
'"Air Navigation Order" means an Order in Council in force under section 60 of the 1982 Act.'.
No. 20, in page 19, line 22, at end insert
'"Scheduling Committee", in relation to an airport, means the body at that airport referred to in section (Scheduling Committee) of this Act. '.
No. 34, in clause 29, page 21, line 39, at end insert
'and the Scheduling Committee at the airport.'.
No. 40, in page 22, line 43, at end insert
'and
(c) the Scheduling Committee at the airport'.
No. 44, in clause 30, page 23, line 12, at end insert
'and where the Scheduling Committee at the airport has notified the Secretary of State that it is unable to allocate times for movements of aircraft at the airport, either for a period specified by the Scheduling Committee or for the indefinite future'.
No. 45, in page 23, line 15, at end insert
'either for the period so specified or for the indefinite future as the case may be'.
No. 46, in page 23, line 18, after 'CAA', insert 'and the Scheduling Committee'.
No. 48, in page 24, line 12, after 'and', insert
'the Scheduling Committee at the airport, and'.
No. 52, in page 24, line 25, after 'CAA', insert
'after consulting the Scheduling Committee at the airport'.
No. 53, in clause 32, page 25, line 20, leave out from 'An' to 'may' in line 21 and insert 'Air Navigation Order'.

Mr. Steen: New clause 6, read with the definition of "scheduling committee" in amendments Nos. 19 and 20, makes statutory provision for the existence and constitution of a scheduling committee at every airport. It has to be at every airport, otherwise the Bill would be a hybrid Bill. According to the chairman of the scheduling committee at Heathrow, who is employed by British Airways, the committee has no ambition to achieve statutory status and would prefer to remain wholly informal and to reach decisions, as at present, by consensus. If, however, part III of the Bill is retained, it will be necessary to confer statutory functions on the


committee, in particular the right to allocate slots unless it notifies the Secretary of State that it is unable to do so, in which event the Civil Aviation authority will, under clause 30, act as a backstop by direction of the Secretary of State in drawing up a scheme for his approval. That involves giving the committee a statutory existence with a minimum of provisions as to what it is and how it is to reach decisions.
Those provisions have deliberately been kept sparse. They provide that every commercial operator, British or foreign, which uses the airport shall be entitled to be a member of the committee and to have one vote, which, it is believed, reproduces the informal position in the absence of the legislation that now exists.
I know that the voting arrangements in the clause which my hon. Friends and I are proposing have been criticised. I do not want to deal in detail with the voting arrangements. If the Minister believes this is the right way to proceed, I hope that he will develop some new arrangements. I should make it clear that the required majority for reaching a decision will be three quarters of the members present, whether or not some abstain, and by that method they could decide what voting arrangements to have. That would not mean one-man, one-vote right through; they could decide by a three-quarters majority to change that arrangement.
That should require a substantial consensus, which there is now, whether for allocating slots or for abandoning the process in favour of the Civil Aviation Authority and the Secretary of State. The proprietor of the airport would be obliged by clause 6(4)
to take all necessary measures to give effect
to a scheme adopted under clause 30 for his airport. It would be interpreted as requiring him to take all reasonable measures within his power.
I have explained the technical side of things. I shall now give the off-the-cuff explanation. We have been fortunate in Britain in having trouble-free airports in terms of who goes where and which slots airlines occupy. The scheduling committee's arrangements have worked very well at Heathrow, Gatwick and other airports. The airlines get together at Heathrow under the chairmanship of a British Airways employee who acts in the fairest and most helpful way. It is a very successful committee. In this way, airlines come into Heathrow—and have done since the war—when they like, according to the availability of slots.
Although Heathrow is said to be near capacity, the House may be interested to know that British Midland Airways, in which I declare an interest, has today been granted a licence by the Civil Aviation Authority to fly to Amsterdam from Heathrow as often as it likes. It managed today to get the slot that it wants out of Heathrow to Amsterdam. It will start in the near future. That is at a time when we are told that Heathrow is reaching full capacity. The scheduling committee has worked very well.
We are concerned that the Bill makes no provision for a scheduling committee. Once the airports are privatised, there will be nothing to stop the new operators from saying, "We will not have a scheduling committee. We will decide when the aeroplanes can fly in and they must pay for it." The bigger the aeroplanes, the more they will like it, because they get more money from more passengers.
The scheduling committee acts impartially, and all of the airlines have a say. It has worked well. There has been

very little discussion of this agreement. New clause 6 would enshrine an arrangement which has worked very well at Heathrow and Gatwick.
My hon. Friends may have received letters from the chairman of the scheduling committee saying that it does not want this new clause because scheduling committees are not needed in other airports. As I have explained, this would become a hybrid Bill if the new clause applied only to Heathrow and Gatwick.
I can understand the Government's anxiety about Gatwick and Heathrow reaching capacity. It is said that air traffic movements are near capacity. That is the view, but it is not borne out by the facts. There is a lot of spare capacity at Heathrow and there would be even more spare capacity at Gatwick and Heathrow if the national air traffic control services were not so hidebound by the military. As the House probably knows, an air marshal is chairman of the national air traffic control services. He imposes the military approach on flexibility and the ability to find new slots—50 per cent. for the military, 50 per cent. for the Civil Aviation Authority.
Instead of squeezing more out of the system and finding new ways in which to get more aeroplanes in, the Government are talking about limits. The inspector of the fourth London air terminal inquiry tried to impose a limit. The Government lifted that limit and the Civil Aviation Authority has pushed it even further, saying that it is not enough to have 275,000 movements an hour, but that there can be 325,000. It is now said that there can be up to 400,000 movements.

Mr. Bill Walker: I am sure that my hon. Friend is aware that the chairman of the national air traffic control services is a civil servant and that his deputy is an air vice-marshal. Moreover, the chairman of the National Air Traffic Management and Consultative Committee, is a serving air commodore. Because of that complexity and the fact that the air commodore is in charge of the consultative committee, occasionally there are difficulties, which appear to have been exacerbated recently.

Mr. Steen: I am always grateful for my hon. Friend's interventions, and this is no exception. He has put the matter and described the problem more clearly than I could. It is well known in the House that I have more air marshals and air vice-marshals in my constituency per square foot than any other hon. Member. However, I am sure that the air vice-marshal that my hon. Friend mentioned is not in my constituency.
There might be a limit at Heathrow or Gatwick, but that time is far off and would be further off if the military did not have such involvement in the present antiquated system. I believe that it was in New York that it was decided that a new way in which to get more aeroplanes into the area had to be found. The system was reviewed and means were found of bringing in more aircraft safely. That is the problem in NATCS. It keeps using the safety argument and fails to find new means, devices and technical developments to bring in more aeroplanes and passengers.
My hon. Friend the Minister has taken the NATCS problem on board. We would all like to hear what he is doing about it. Heathrow and Gatwick have finite capacity, and the limit will probably be reached at Gatwick first. My hon. Friend is anxious that, when capacity is


reached, whether at peak times or completely, there should be some mechanism for coping with the scheduling committee which, hitherto friendly, might start to fight because there is no more space.
My right hon. Friend the Secretary of State's approach is that there is a full lifeboat. A chap swims to the lifeboat, but, if he gets in, someone must be displaced or the lifeboat will sink. The Secretary of State says that he will decide which chap to throw out and which to bring in. That is the wrong approach. How will he decide which chap to throw out? That is an impossible job. I do not wish to embarrass my right hon. Friend by saying that he would not make the right decision, but he cannot throw out foreign airlines because of bilateral agreements. He can throw out only British airlines. If he has no statutory scheduling committee, my right hon. Friend is saying that we will have to bring in a foreign airline, clinging on to the edge of the lifeboat, and throw out a British airline.
How will my right hon. Friend throw out a British airline? What will be the result? He must tell us how he will operate a scheduling committee from Whitehall. The only other approach is to say that the scheduling committee will make the final decision. I believe that that happens in Tokyo. The committee might say, "We are full on Mondays and Wednesdays, but you can come in on Tuesday afternoon. There will be no appeal." That is what has happened in Britain thus far. The committee will say that there is no space, or it will push NATCS to find space, but it will not allow an appeal to the Secretary of State.
If we were to allow an appeal to the Secretary of State beyond the scheduling committee, what would he do? He would be placed in control of the lifeboat. The scheduling committee would collapse, because the airlines coming into Heathrow would say, "We have no business with the scheduling committee. We want to come in at 10 o'clock. We will appeal direct to the Secretary of State." To allow that airline in, my right hon. Friend would have to throw out a British carrier, and the British carrier, back in the water, would in turn appeal to the Secretary of State, so he would spend all his time, day and night, coping with Gatwick and Heathrow and the limited capacity that he had created. There would be no problem if the scheduling committee were to decide that the limit had been reached.

Mr. Terry Dicks: My hon. Friend must be aware that in the past the system that he is advocating has not worked because some British airlines, when told by the scheduling committee that they could arrive or take off at specified times, have flatly refused to abide by that decision and have sent out schedules showing that they would not arrive and take off at other times. Indeed, one airline—my hon. Friend probably knows of the case—pushed itself on to the line and took off at the wrong time.

Mr. Steen: I am sure that my hon. Friend is quoting the exception rather than the rule. The general rule is that the scheduling committee has worked successfully since the war. Everyone accepts that it has worked well. I understand what my hon. Friend says, but his example would not be covered by the Bill.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): Why should we place

more trust in the scheduling committee, which is mostly composed of foreign airlines, not to throw British airlines out of the lifeboat than we would in the Secretary of State?

Mr. Steen: The Minister poses a problem which has not existed and which need not exist. He should accept that the airlines can run their own operations. Conservative Members believe in consensus, not in more centralised control. We prefer decentralisation to the consumer to central Government control. The new clause would enshrine in statute a system which has existed largely without fault for the past 40 years at Gatwick, Heathrow and other airports.
The Minister says that he does not believe that the system will work when the airports are privatised. Why not? Why should the scheduling committee cease to be effective as soon as airports are privatised? The Minister should realise that the airports are under no obligation to set up scheduling committees. They could allow planes to come in when they liked and charge higher sums for slots, which would then be marketable.
Conservative Members are 100 per cent. in favour of privatisation, but we must protect the small airlines which will suddenly be pushed out of the best slots by the big airlines from other countries, which would pay more for the slots or would say, "There are more passengers at 10 o'clock than at 12 o'clock, so we will put the small airlines in at 12 o'clock." We must protect our industry, rather than score goals against our own side. Conservative Members who support the new clause fear that that may happen.
I do not wish to labour the point, which has been well made. I wish to discuss amendments Nos. 44, 45 and 46, which run parallel to what I have just said. If my right hon. Friend the Secretary of State believes that we cannot set up a statutory scheduling committee, he should have regard to those amendments.
Amendment No. 44 goes to the heart of the matter. It would prohibit the making by the Civil Aviation Authority of a scheme to allocate times for the movement of aircraft into airports and its approval by the Secretary of State, unless the scheduling committee at the airport has thrown in its hand and notified the Secretary of State that it is unable to perform its task. That is the flip side of the coin. If there is no statutory scheduling committee, we must work on the basis that, once the airports are privatised, they will set up scheduling committees, because that is the only way in which airports can operate. The Secretary of State should not become involved unless they press the emergency button. Let them continue to run the airports until they say that they have reached capacity and cannot squeeze in another plane at peak times or generally. Once they have pushed the emergency button, the Secretary of State will have to make the decision. That system will not work because all the airlines will follow suit and will want to go to the Secretary of State.
The amendemt would express what is understood to be the Government's intention—to provide the CAA and the Secretary of State as backstops in case the aircraft operators using the airport cannot adopt an allocation of slots by consensus.
I am grateful to the chairman of Brymon Airways, which flies to my constituency, for helping to draft the new clause. He used to work for British Airways. He proposed this as an alternative to a statutory scheduling committee. Not only does this accord with the principles generally


accepted in the free world, and strongly supported by British Airways, but it was evidence to the terminal 4 planning inquiry that the scheduling should be done by consensus of users, not by Government or other official bodies. The consequence of this essential amendment is that it becomes necessary to give the scheduling committee, if not a statutory status, some status which, according to information from the scheduling committee for Heathrow, the airlines do not expecially desire. The necessary statutory status will be conferred by new clause 6, which, of course, attempts to do this in a sparing way but leaves each of the scheduling committees to manage their affairs as much as possible.
The proposal is of great concern to nearly all British carriers. They have had differences of opinion about the voting methods and make-up of the operation, but I have not heard a British independent or state airline say that the scheduling committee is not the right way to run the operation. I will not list all the airlines that I have contacted, but they all say that we must have scheduling committees at Heathrow and Gatwick. We cannot allow the Secretary of State to dominate the scene. There would be no problem with this Secretary of State. He would do it extremely efficiently. However, what would happen if we had a new Secretary of State or—heaven forbid—a Labour Secretary of State? That would completely change the picture.
Without making too many nasty jibes—the hon. Member for Aberdeen, North (Mr. Hughes) did not make a party political point about this—Opposition Members should agree that it is extremely important that we listen to what the airlines have to say—not only the independent airlines, but the state-run carriers. If they want scheduling committees, what steps will the Minister take to ensure that they are set up? They are not covered by the Bill, and the private airport operators are not obliged to have them. What steps will he take to reduce his power of intervention so that it is not a matter of the Secretary of State versus the airlines, but one of consensus among the airline users? Conservative Members believe strongly that the Minister will get it wrong if he allows the Bill to proceed without amendment or the new clause.

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Mr. Robert McCrindle: I shall address the House rather more briefly than my hon. Friend the Member for South Hams (Mr. Steen)—

Mr. Steen: But not as well.

Mr. McCrindle: That is a matter of opinion. I leave my hon. Friend to form his own opinion.
Speaking as a signatory of the new clause, I hope that the Minister will find it possible to accept it. Perhaps it is the combination of experience in this place and a certain scepticism when I anticipate a ministerial reply that leads me to express to my hon. Friend the Under-Secretary of State the even more fervent hope that if, for some reason, he finds it impossible to accept the clause as it stands—I accept that it is a fairly extensive clause with many implications—he will find it possible to accept the principle which underlies it, which holds out the concept of the scheduling committee as a well-tried instrument embodying voluntary association and self-regulation. I should be surprised if the Minister did not find it possible

to go along with the clause that far and accept that the scheduling committee have built up a considerable standing over the years.
The Minister might consider it appropriate to introduce some qualifications which would render it impossible to accept the new clause as it stands. I hope to persuade him that, even if that were to be the direction of his response, he would be able to underpin the scheduling committee as a tried and tested instrument.
It may be said that it would be better by far to leave the creation of the scheduling committees entirely to the airport authorities and the airlines, and in an ideal world I would have to accept that proposition. My hon. Friend the Minister must understand that the shape of the Bill necessarily means that we are creating an entirely new situation which is fraught with difficulties and viewed by the airlines with a considerable degree of apprehension. In an attempt to persuade my hon. Friend to assist my hon. Friend the Member for South Hams and myself in the pursuit of the new clause—he knows that I try always to assist him—I hope that he will be able to say, if he feels that it goes too far, that he approves the principle of scheduling committees but believes that to impose a scheduling committee on every small airport throughout the country would be taking the principle a little too far.
If the Minister were prepared to argue along those lines and were prepared to advance alternative solutions, I suspect that some of my hon. Friends would understand that approach and would feel that in some respects the proposition contained in the new clause would be improved as a result. I took the point of my hon. Friend the Member for South Hams when he explained that, if he had taken that line within the clause, he would have created hybridity. If we can persuade the Minister to accept the principle that is contained in the clause and to endorse the concept of scheduling committees, I believe that common sense will dictate when a scheduling committee becomes necessary. If my hon. Friend the Minister prefers his own formula, I doubt whether too many of my hon. Friends would insist that every last word and detail of the new clause should be incorporated in the Bill.
If the new clause is at least acceptable in principle, it may be expecting too much to go along with the proposition that every airport user should have equal voting rights. It would be nonsense if every user—some users might operate an airline service no more than once a week—were to have the same power, influence and voting capacity as international airlines that use a certain airport every day. There would be a strong case, subject to the principle of a scheduling committee being accepted, for having some weighting attached to the voting within the scheduling committee.
That is the nub of the appeal that I want to make to the Minister. He may decide that although the concept of the scheduling committee is acceptable to him and has been tried and tested by long experience, he does not wish to enshrine it in legislation. I ask him to think carefully before he reaches that conclusion, because there is no doubt that there is a vast feeling of apprehension within the airline industry. I believe that it would give a great deal of comfort to those who are broadly in support of the main issues underlying the Bill if there were to be written into it the requirement to create a scheduling committee.
In supporting the broad approach of the Bill, I look forward to the reply of my hon. Friend the Under-Secretary of State. I anticipate that he will agree with the principle that underlies the new clause and that he may even agree, subject to the qualifications that I have outlined, that it should be incorporated in the Bill rather than proceeding on a voluntary basis.

Mr. Bill Walker: I apologise to the House for not being present when the debate began. I was detained outside the House prior to the debate being initiated by my hon. Friend the Member for South Hams (Mr. Steen).
The new clause, which is linked to many amendments, deals primarily with the need to introduce more competition at our airports. However, I shall deal first with scheduling committees—I hope to do so briefly—before addressing myself to the introduction of greater competition.
My hon. Friend the Member for South Hams mentioned that the airlines are uneasy about the operation of national air traffic control services, and I have expressed unease as well. It is no secret that that has upset some of my former colleagues in the Royal Air Force, who are unhappy about some of the things that I have said. I must repeat that what I said in earlier debates was factually correct. I am sure that my hon. Friend the Under-Secretary of State is well aware that in my presence the airlines expressed their unhappiness about certain features of national air traffic control services. No one doubts their professionalism and integrity and the efforts that they are making to do the best that they can, but there are doubts about whether adequate consultation is taking place and whether sufficient in-depth consideration is being given to the operation of the modern air transport business. Those feelings lie behind the unhappy atmosphere that exists, which I am confident can be removed.
Amendment No. 69, which I tabled, was intended to deal with that problem. I make no comment on the fact that the amendment has not been selected, save that I believe that it would have dealt positively with the root cause of the problem, which is what the consultative process is not working in the way that Parliament intended. Given the way in which national air navigation orders are dealt with, we cannot pray against them. Amendment No. 69 was intended to make the necessary changes to ensure that in future the House would have the opportunity to pray against navigation orders where there was obviously unease, unhappiness and uncertainty. It was never intended to impinge upon the professionalism of those who make recommendations to the Secretary of State on matters of air safety. The amendment was directed to the introduction of the consultation that Parliament intended.

Mr. Steen: I endorse what my hon. Friend is saying, but I think that his argument goes a little further than he has suggested. If the capacity of the NATCS system expanded, the need for the Minister to have reserve powers to deal with an airport which reached capacity would never materialise, especially with the larger aircraft that are coming on stream.

Mr. Walker: I agree that many bogeys have been created by those who have suggested what may or may not take place. Great concern was expressed that airports would reach maximum capacity with the growth that was

expected and that the system would become clogged. That fear was expressed in aviation debates no more than five years ago, or perhaps a little further back than that. In fact, that has not happened.
Anyone who has spoken to the people who run the scheduling committees will know that the airlines have confidence in those committees. The committees do tradeoffs or deals, call it what one will, but among themselves they reach agreement on how the slots can be allocated.
It would be helpful if something could be put into the Bill to guarantee that there will be no possibility of any future interference by airport authorities in the allocation of times for the movement of aircraft at busy airports. It may be possible to do that in the other place. That sums up the problem. All the airlines fear that at some time in the future the airport owners, managers or authorities will interfere in the allocation of slots.
I am sure that my hon. Friend the Minister, who has tried to be helpful on these difficult matters in the past, will realise that it is more sensible to have a provision in the Bill rather than write it in, as the amendments do, that scheduling committees must be a statutory requirement. It would be much better to remove the root cause of the problem, which is the intention of my amendment No. 69.
I shall be speaking later on new clause 9, but I shall not spend much time on it because I hope to deal with most of what will be in that new clause on new clause 6 because the two are related. There is no doubt that the airlines are concerned that once the BAA enters the private sector it will be under no statutory duty to meet demands. New clause 6 is to move
the exclusive right of providing operating and/or licensing airport terminals and/or other associated airport activities
Am I reading the wrong proposal?

Hon. Members: Yes.

Mr. Speaker: Order. I hope that the hon. Gentleman will not deal with new clause 9, which is in the next grouping.

Mr. Walker: It is my fault; I came in late. I did not know the point we had reached. I apologise.
I have said as much as I intend to say at this stage on the matter of national air traffic control services. I shall deal with new clause 9 when we get to it.

Mr. Ernie Ross: I intervene briefly, as I have an airport in my constituency which was not dealt with in the Bill because it did not qualify in terms of the traffic generated. I also intervene with some hesitation because the airport is supported by a local authority with which I have political differences on a daily basis. However, the airport serves Dundee and Tayside. Tayside regional council has provided a service which is absolutely necessary if regeneration of Dundee is to take place.
I was not able to be present in Committee, but having listened to the hon. Member for South Hams (Mr. Steen) speak I can see that there must have been some disagreement in Committee and that there may have been some concern on both sides of the Committee among hon. Members who have small operators at an airport in their constituency.
In Dundee, the present operator, EuroAir, as recently as Monday, introduced a second service for Dundee. The two services are a direct link between Dundee and Heathrow, with a stop at Carlisle. We want to know from the Minister, if he does not accept the new clause, what


provision there is within the Bill, what powers he will have and what guarantees and assurances he can give to small operators that once the airports, particularly Heathrow, are privatised they will not find their current slots put out to the highest bidder. Certainly, if EuroAir had to bid for its present slots into Heathrow against TWA or any other international airline it would obviously be unsuccessful.
At present, the service operates using a 748 carrying about 40 passengers. It is vital to the well-being of Dundee and Carlisle. We want to hear from the Minister that small and medium-sized operators can expect some protection to ensure that once the airports are privatised the users committee, the scheduling committee or the airports authority itself does not put the various slots out to the highest bidder so that they will lose out.

Mr. Bill Walker: Does the hon. Gentleman agree that, with all the other developments in Tayside, such as the enterprise zone and various other high technology areas and the high technology park, the airport is seen as an essential part of communications and that the new operations by EuroAir are seen by the local people as being essential? Getting into Heathrow is vital for such operations.

Mr. Ross: Absolutely. When we were trying to attract industry to Dundee, someone coming from abroad would arrive at Heathrow, change planes and go on a shuttle to Edinburgh and there was then either a car or train journey from Edinburgh to Dundee. People were not interested. We now have a twice-daily direct service to Dundee and we find that it is easy to attract prospective industrialists to Dundee. More importantly, we have given the people and the companies currently in Dundee a direct link between Dundee and Heathrow. From Heathrow they are able to take a connecting service to their destination. Therefore, the service benefits Dundee and Tayside and we would wish to protect it.
Companies the size of EuroAir are obviously operating in a competitive market and are finding the costs difficult to meet. If EuroAir lost its Heathrow slot, I think that that might well be the end of the service for Dundee. It could be a serious blow to the Government's intentions because they have spent a considerable amount of money trying to regenerate Dundee and part of that regeneration is the attraction of the direct link between Dundee and Heathrow.

Mr. Dicks: I should like to speak in general support of new clause 6. There are about 70 airlines in Heathrow, in my constituency. The scheduling committee has operated very well, generally speaking, for some considerable time. In an intervention in the speech of my hon. Friend the Member for South Hams (Mr. Steen) I said that on one or two occasions the decisions of the scheduling committee had been bypassed. However, they were exceptions, as was rightly pointed out.
The airlines that use Heathrow generally feel that the scheduling committee should remain intact and that the Secretary of State's powers should be used as a last resort. The airlines have asked me to make the point that, if the 77 or so operators can come together and agree about how the runway should be used and the times the runway should be used, that is how it should be left. I accept that there could be some effect of weighting. I am concerned

not about one airline, one vote but about the principle of leaving the operation of the runways to the scheduling committee and those airlines which operate in and out of Heathrow and make it the successful international airport that it is.

Mr. D. N. Campbell-Savours: I intervene briefly to support the points made by my hon. Friend the Member for Dundee, West (Mr. Ross).
Two weeks ago, the Civil Aviation Authority produced a document called CAP 157—[HON. MEMBERS: "It is 517."] Hon. Members may well correct me. I am no expert in these matters, and I did not serve on the Committee. The document suggested that certain routes should be removed from Heathrow; certain airlines would no longer be able to operate from there, in favour of larger operators, because their interlining activity was not substantial enough.
Over the past few weeks, several smaller operators have objected strongly. I am told that those matters are currently being discussed in the scheduling committee at Heathrow, but the smaller operators are concerned about whether their interests will be fairly represented in those debates. Listening to today's debate, and particularly to the hon. Member for South Hams (Mr. Steen) in moving his new clause and putting his case to the House, I thought that we might well need the Secretary of State to intervene. The only way in which we can secure the survival of the small regional routes may be by way of political intervention. We may not be able to rely on the arrangements that the hon. Gentleman wishes to set up. Pressure might be exerted, for commercial reasons, for the largest operators willing to pay the highest prices to have the routes, which might not be in the best interests of the smaller operators.

Mr. Steen: The point that the hon. Gentleman makes is valid if the capacity of the airport has reached saturation. However, does he agree that there are two ways of approaching that? First, a scheduling committee might say, "Sorry—Tuesdays afternoons only"—that would be for everybody—or one could destroy the scheduling committee and make the Secretary of State answer every airline's request for a slot. He then becomes the scheduling committee. Alternatively, the Secretary of State can say, "I cannot do this. I shall appoint an agent, as they do in Spain and Portugal." That agent would be British Airways, which would have to decide everything. That might be worse.

Mr. Campbell-Savours: All that I want is an arrangement whereby I know that commercial pressures can be resisted. If it means that the politician is uniquely able to resist those pressures, I must support the right of the politician, indeed the Secretary of State, to do so. If we cannot rely on the scheduling committees to look reasonably at the rights of smaller airlines that cannot pay higher prices, we must resist the new clause. I would have to vote against it if it were forced to a Division.

Mr. Snape: May I assist my hon. Friend before he takes that decision? I am following carefully what he is saying, but is he aware that the present Secretary of State proposed in a previous Civil Aviation Bill, which was defeated in Committee, to auction off slots at airports such as Heathrow to the highest bidder, which in itself would have militated against the interests of smaller airlines, which he and, I think, the hon. Member for South Hams


(Mr. Steen) are seeking to defend? Therefore, with some Secretaries of State I might be able to support my hon. Friend, but I cannot do so with the present one. I think that the hon. Member for South Hams will agree with me on that.

Mr. Campbell-Savours: I accept my hon. Friend's point, but everyone, including the Secretary of State for Transport, has to take into account the considerable regional pressures—not only Labour but Conservative—that would be exerted upon any Secretary of State who thought that he could deal with the regional routes in that way. Some hon. Members would vigorously oppose the auctioning off of those routes if it meant that we were to lose the service that is currently available to small local airports.
I have intervened to draw attention to the CAA document 517, which is causing great concern. One problem is that we believe that the material on which the conclusions in that document were based is faulty. It is based on research that was done prior to EuroAir being the carrier, when Air Ecosse was the carrier. EuroAir is most concerned that its future should not be wrapped up in arguments and discussions about the effectiveness of Air Ecosse. We are grateful for the work that Air Ecosse did in the development of that route, but it has not provided, and did not at that stage seek to provide, the level and frequency of service that EuroAir has successfully provided since it took over in November. If any such decisions are to be taken in the future, they must be based on brand new research.
If that research takes place, the Minister will find that much of the traffic being developed by EuroAir is interline traffic, whether passenger or cargo. That traffic is crucial to the development of the route. We cannot afford to lose it. We are looking to the Minister to protect our airline. In the county of Cumbria, we see it as our airline in the same way as my hon. Friend the Member for Dundee, West does in Dundee. The future of that route needs to be secured. I hope that the Minister, if only in a giveaway remark, will show some understanding of the position in which we find ourselves.

Mr. John Wilkinson: My hon. Friend the Member for South Hams (Mr. Steen) and Conservative co-signatories of his new clause are introducing one of the most important aspects of the debate in terms of the effect of the new clause on the airlines and the potential benefit to the travelling public.
The hon. Member for Workington (Mr. Campbell-Savours) was right to put the debate in the context of the document CAP 517, which was advice to the Secretary of State from the Civil Aviation Authority on air traffic distribution in the London area.
The new clause may have its minor deficiencies. Of course, some airports licensed for passenger traffic will have, for example, only one operator with an air operator's certificate. In those circumstances, I wonder how the three-quarters majority will be achieved. However, those are matters of detail that I am sure, with good will, the Minister can put right in the other place.
Nevertheless, the principles of new clause 6 is exceedingly important—that in the scheduling committees, the voluntary agreements of carriers should have priority and be paramount in the allocation of slots and of

movements in the light of the capacity available at particular airports. In past years—several of us will be veterans in these matters, not least my hon. Friend the Member for South Hams—we have seen the attempts by the Government to forecast movements and to match those forecasts with what they believe the capacity of certain airports to be. Ever since the abortive attempt to have a new airport at Maplin, we have seen those forecasts go awry. Even Governments in their wisdom cannot foresee precisely the future level of traffic or demand. Therefore, the best people to allocate slots and to decide how those slots are to be matched to capacity are the airlines themselves. As my hon. Friend the Member for Hayes and Harlington (Mr. Dicks)—perhaps I may call him the Member for Heathrow—rightly said, the system has worked exceedingly well, and the intervention of the Secretary of State should be a last resort, a backstop, if voluntary regulation and agreement fail.
It is noteworthy that the CAA, in the press release that it issued on 25 March, when it published CAP 517, clearly stated:
The vast majority of those consulted urged that the present system should be allowed to continue whereby slots at congested airports are allocated on a purely voluntary basis through a Scheduling Committee composed of all airlines operating at the airport.
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The press release goes on to list a number of qualifications, but it also makes it clear that, in tendering this advice, the authority has taken account of the policy objectives of the Government—
in particular the need for air services to be operated where they best meet the needs of the travelling public and the desire to maintain London as a major international centre.
The authority suggested a package of measures built round the existing scheduling committee system referred to by my hon. Friend the Member for South Hams. The hon. Member for Workington referred to the most alarming of those recommendations—the restriction at Heathrow on new domestic scheduled routes and, especially,
a carefully phased removal from Heathrow, should the Scheduling Committee at Heathrow be unable to accommodate all reasonable demands for international scheduled services, of those domestic routes which carry only small numbers of passengers who travel to Heathrow in order to connect with an international flight. These are direct services from Heathrow to Carlisle and Dundee"—
the route mentioned by the hon. Gentleman. I remember the good old days when Autair started that route and we landed among the sheep at Crosby on Eden and then went on to Leuchars because Dundee Riverside had not been fully opened. The other direct services to be affected would be
Inverness; Guernsey; The Isle of Man; Plymouth and Newquay.
I am sorry again for my hon. Friend the Member for South Hams, because he will have to travel by car to reach his constituency. The other route to be affected was the route to Jersey.
All these are important routes in their own way. The other major course suggested was a restriction on the number of daily flights which may be operated by domestic routes from Heathrow
other than those with air services operated in an effective competitive environment (namely Heathrow to Glasgow, Edinburgh and Belfast)".
There is a problem here. However, over the years operators have been able to get together and make the best use of the slot time available. I am sure that will continue.


All the evidence suggests that the improvements in air traffic control, the opening of terminal 4, and, hopefully, the opening of a fifth terminal will overcome the difficulties. Therefore, there will be no need for the Secretary of State's new powers, especially the powers in clause 30(3)(b) for control of movement to be made by charging.
The CAA, in its press release, makes it clear that, in its judgment, that would lead
to increased domination by the larger and richer international scheduled airlines. The Authority concludes that a price mechanism, whether through increased landing charges, a direct passenger charge or the compulsory"—
I stress "compulsory"—
trading of landing and take-off slots among airlines would not be compatible with the Government's objectives and would almost certainly be inconsistent with this country's international obligations.
That was referred to by my hon. Friend the Member for South Hams in his excellent opening speech.
The wisest course would be for the Government to accept this new clause or to amend the Bill in the other place to give effect to its provisions. That is what I recommend to the House.

Mr. Tony Lloyd: This new clause has my support and I shall be interested to see how the Minister responds to the debate. In Committee we attempted to table amendments that would have had the effect of forcing upon the CAA and the Secretary of State the responsibility for promoting the interests of the regional airports and therefore the communities which they serve. Those amendments found no merit with the Government Front Bench and it is in that light that I give my support to this new clause.
There is a need to build in some measures which will protect the interests of the smaller airports precisely because it is the smaller airports which are serving the communities of Dundee, Carlisle and the other smaller areas mentioned by hon. Members. It is important that we have such a control. When the Minister replies I hope he will comment on the Civil Aviation Authority document which has been mentioned by various hon. Members.
That document did not come as a bombshell to some of us because we thought that that was what the CAA had always been up to. It certainly was contrary to the promises and claims that were given by the Secretary of State and by his Ministers. They assured us that the CAA would be objective and fair, and would try to assist the smaller airports. I would welcome a clear comment from the Minister on the CAA document. Will the Minister tell the CAA that he rejects the logic of its present approach? If he does not, his response will be grossly inadequate and will fail to recognise what the hon. Member for South Hams (Mr. Steen) has sought to do in the new clause. It is important to have the Government's position on record.
My preference has been that the regulation, at a political level, should ultimately rest with the Secretary of State. The Secretary of State should take control, as that is the normal way in which state bodies should be regulated. However, the present Secretary of State lectures about himself when he talks about the dangers of central Government control.
Sadly, on previous occasions the Secretary of State has demonstrated that his decisions are perverse and that they do not operate in the interests of the air traffic industry. I regret that it is for that reason that we have to move away

from giving the Secretary of State such control. Such control ought to be given to the CAA because that is why it exists. The CAA, however, is operating in such a way as to suggest that it would not do the job which most of us would wish to see it do. Therefore, we have to move towards new self-regulation.
I mirror the words of my hon. Friend the Member for Workington (Mr. Campbell-Savours) that, in some ways, it is odd that the users of a service should be the operators of this self-regulating system. There are inherent dangers in such a situation because the operators could set up their own neat, cosy arrangements and keep out those who, in the long run, would perform better than those in the existing set-up.
There is no absolute. I have reluctantly come to the conclusion that self-regulation has merit because it moves control out of the hands of those who have proven, by their actions, that we cannot trust them.

Mr. Campbell-Savours: Does my hon. Friend accept that there is a danger in deploying arguments about the characteristics of individual Secretaries of State and the way that they may conduct themselves? We should take more of a macro view of these matters, irrespective of the political personalities involved. We should make our judgments on that basis.

Mr. Lloyd: How does my hon. Friend suggest that we take the macro view without examining the possibility that the present Secretary of State is, as Rab Butler said, the best Secretary of State that we have got? In those circumstances our macro view is bound to be conditioned firmly by the incumbent at any given time.
To that extent I am reinforced in my view that there is sufficient to commend this new clause because it moves us into an area where we have no reasons for distrust, whereas we distrust the other options put forward.

Mr. Robert Adley: I declare my interest in the hotel and tourist industry but that is the least of my considerations this evening. As my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) said, we have been having these discussions for some years. The real challenge is to decide who takes priority—the regional airports and the small carriers, or the big international airlines with the clout, carrying package tourists from California or Tokyo. My hon. Friend the Minister should always remember that he would be unwise to take action which could disadvantage regional airports and small airlines, which are struggling to build up services which are, and will in future be, a vital part of the industrial and commercial infrastructure of Britain, in favour of a step which may well bring in a few more package tourists. When it coms down to it, there are more people who will vote for him in Dundee and Workington than there are in Tallahassee or Tokyo.

Mr. Gerald Howarth: This is an important matter and it has been well covered by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson). We are anxious to preserve the status quo. The scheduling committees have been operating quietly and unobtrusively—few hon. Members were aware of their existence until the debate on airport policy last year—and they have been highly successful.
The scheduling committees meet twice a year to plan the forthcoming season and to arrange the schedules for 80


busy airports around the world, with about 120 carriers involved. It is significant that, at a time when everybody is saying that Heathrow and Gatwick are full, that is not the case. It is not thanks to the BAA, but thanks to the work of the scheduling committees that those airports are able to take the extra capacity demanded of them by the airlines, who, after all, are the immediate customers of the airport.
The scheduling committees can slot in ad hoc charters in off-peak periods. They can slot in freighters and all sorts of extraneous flights which might otherwise be told by the airport operators, "Sorry, old boy, you can't come in. There is no room." Those people have set as their task the maximisation of the airport facility and they are to be congratulated on what they have done.
There is a difficulty in having majority voting and my hon. Friend the Member for South Hams (Mr. Steen) is aware of that. When the committees take about 2,000 decisions each season, or 4,000 decisions a year, it will be difficult for all those decisions to be arrived at by a majority vote. The chairman of the scheduling committee at Gatwick makes the important point:
Each airline scheduler faces the same problems as his colleagues. He may require help one day and his colleagues may ask for reciprocal help the next. It is therefore the requirement of the guidelines that co-ordination should be conducted in an atomosphere of mutual trust and cooperation. This leads to the most efficient use of facilities and maximum benefit to the travelling public.
That makes the point most forcibly.
It may be that new clause 6 is not the best solution to the problem, but I urge my hon. Friend the Minister to accept that some provision should be made in the Bill to ensure that something which manifestly does work should be continued. We should not put that position in jeopardy when the BAA moves into the private sector. There is a problem because at the moment there is some ministerial control, but when the BAA moves into the private sector, that will not be there.

Mr. Steen: As soon as the BAA is privatised there need be no scheduling committee at all and I am sure that that is the crux of the matter to which my hon. Friend the Minister must direct his mind.

Mr. Howarth: My hon. Friend is right. That is why so many of us on both sides of the House have chosen to speak on this matter. There is concern that a privatised BAA may—I say "may" because one should not assume that it will be hostile to the scheduling committees—decide that it wants to make the allocation rather than the scheduling committees. That is why new clause 6 should be in the Bill.
The chairman of the Heathrow scheduling committee, Mr. Gerry Hewson, said:
It is appreciated that it would be helpful to have a clause in the Bill which precluded the possibility of any future interference by airport authorities in the allocation of times for the movements of aircraft at a busy airport.
That is the essence. The fact that Cardiff, Birmingham or Dundee do not require scheduling committees does not matter. I hope that my hon. Friend has got the message that the scheduling committees have done such a marvellous job in helping the airlines and passengers at Gatwick and Heathrow that we do not want to lose them.

Mr. Michael Spicer: My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) wanted me to accept the principle behind new clause 6, which is that the scheduling committee is a tried and tested organisation which works well and will continue to do so on a voluntary and self-regulating basis. That was the tone of many of the speeches that have been made by hon. Members on both sides of the House.
I should be happy to give the assurance for which my hon. Friend asks. There is no question but that the Government think that the scheduling committee does a good job in the way that my hon. Friends the Members for South Hams (Mr. Steen), for Cannock and Burntwood (Mr. Howarth) and others have eloquently stressed. There is nothing at all between us on that. The Government have no intention of altering that position or, indeed, of not supporting the present position. Nor does the CAA necessarily have any intention of not doing so.
Paragraph 3.94 of CAP 517 talks about the authority putting great weight on not disturbing existing arrangements prematurely. I do not disagree that there has to be a discussion about what is meant by "prematurely"—

Mr. Steen: Will my hon. Friend give way?

Mr. Spicer: It is a bit premature, but yes.

Mr. Steen: I am grateful to my hon. Friend for giving way at this early stage. He cites the CAA's document and says that there should not be premature interference. Does he agree that the Government should not interfere prematurely either?

Mr. Spicer: Having said that I can give my hon. Friend the Member for Brentwood and Ongar the assurance that he has sought, let me deal with the nub of the amendments, which are aimed at a statutory provision for the scheduling committees. Subsequent amendments are linked to new clause 6 which, for instance, will provide the scheduling committees with certain voting rules. It is not unfair to say at the beginning that the scheduling committees, certainly those at Gatwick and Heathrow, do not like the concept of a statutory provision for a scheduling committee. I am sure that my hon. Friend has seen a letter of today's date from the Gatwick scheduling committee addressed to myself, and no doubt to others. Indeed, it has been addressed to my hon. Friend. It states:
The aviation industry does not need to have Scheduling Committees forced upon it.
On reflection, my hon. Friend the Member for South Hams may accept that it is the voluntary nature of the committees that is at least in part their strength.
To enshrine certain specific voting requirements in legislation might itself negate one of the main functions of the committees, which is to carry out—if that is the right word—the IATA rules. One of the functions which the scheduling committees carry out so well is to slot in international requirements. Slotting arrangements at particular airports must relate to the international scene.
One or two specific matters have been raised in our wide-ranging debate. First, I welcome what my hon. Friend the Member for South Hams told the House about British Midland's plans to fly to Amsterdam. I am sure that many of my hon. Friends and many Opposition Members will join me in welcoming that news. Competition on


routes into Europe is essential to the Government's objectives. That announcement shows the working of the superb agreement that we have with the Dutch Government, whereby airlines can mount the frequencies that they wish and have almost complete freedom, subject to the fitness of the airline.

Mr. Snape: Superb for the Dutch.

Mr. Spicer: We have been talking about a third British airline which is apparently about to fly to Holland. What is the hon. Gentleman talking about?

Mr. Snape: The much-trumpeted agreement gives the Dutch the right to fly passengers from Heathrow to Schiphol and on to the far east at the rate that they would pay if they flew from London. In return, we are given Maastricht, which is the Dutch equivalent of Gateshead.

Mr. Spicer: One of the matters under discussion is Amsterdam.—[HON MEMBERS: "What is wrong with Gateshead?"'] We are talking about Amsterdam. The hon. Gentleman is wrong again when he implies that the agreement is not working to the benefit of British airlines. Both British Caledonian and British Airways have had a much greater growth in traffic on that route than the average for the rest of Europe. They are doing extremely well on that route.
The questions raised by the hon. Members for Dundee, West (Mr. Ross) and for Workington (Mr. Campbell-Savours) are not as marginal as they might appear. From the point of view of their different airports, they were concerned about the recommendations in CAP 517 for the removal, under certain circumstances, of access to Heathrow from Dundee or Carlisle. First, that is merely a recommendation by the Civil Aviation Authority. It has now been sent out for further consultation before a formal recommendation is made to the Government. The Government will then have to take a view about the formal recommendation. Not even the final round of recommendations from the CAA has been reached. I am sure that all those involved in the consultative process will have heard what the hon. Members said about new factors and frequencies.
Secondly—this may answer the point made by my hon. Friend the Member for Christchurch (Mr. Adley)—the Government have made it clear that one of our prime objectives is to ensure fair access to Heathrow for the regional airlines from regional airports, for precisely the reasons that have been given in the debate. The House should consider whether, if, as the hon. Member for Workington suggested, one enshrined in legislation the absolute rights given to the scheduling committees, that would be more or less likely to preserve the integrity of regional routes and their access. That is a matter for debate.
When my hon. Friend the Member for South Hams made his brilliant analogy with a lifeboat, he kindly allowed me to ask him why he believed that the scheduling committee, on which there is a majority of large foreign airlines, should necessarily guarantee the access and competition that could perhaps be better supplied by the reserve powers given in the Bill to the Secretary of State.

Mr. Dicks: The answer is that the airlines are more likely to make the right decision than is the Secretary of State.

Mr. Spicer: My hon. Friend, who is proud of his constituency interest, talks about getting it right. However, getting things right is a subjective matter. Right for whom? The smaller airlines may not be so well represented in the scheduling committees, and one may ask whether the answer will be right for them.

Mr. Wilkinson: This matter is of great concern to hon. Members on both sides of the House. My hon. Friend quoted from the CAP document. The concluding major paragraph is germane to our discussion. It says:
The Authority recommends that the measures to restrict access to Heathrow etc. should be brought in only when the Secretary of State is advised by those directly concerned that it is necessary to do so
—in other words, by the airlines. The CAA
has therefore avoided the need to forecast when these measures need to be taken and has not needed to assess the effects of future events such as the opening of the Channel Tunnel.
We are talking in a hypothetical way. All the evidence suggests that the present arrangements work perfectly well and that we should not seek to reinforce reserve powers for the Secretary of State.

Mr. Spicer: Hypothetical debates are always the best. I shall continue to present my hypotheses. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) talked about the powers as backstop powers. I agree with him about that. It may well be, as my hon. Friend the Member for South Hams said, that the matter is 10 years off. I make no judgment about capacity at airports. I simply say that we believe that giving backstop powers to the Secretary of State under the Bill is the best approach to the matter, and preferable to giving, through legislation, the initiative to the scheduling committee.
As my hon. Friend the Member for South Hams said, new clause 6 is not the main point. One could make some play with new clause 6. Whether or not it is hybrid, one could say that it imposes conditions on airports that are not relevant. I think that my hon. Friend saw the new clause as a way of introducing the subject. He called amendment No. 44 the flip side of the coin, and I sense that that is the amendment that he wishes most to pursue.
I have outlined the basic problems of new clause 6. The scheduling committees—and, indeed, the industry—do not want that sort of compulsion, and its extension to all airports is something which I believe most hon. Members would think inappropriate.

7 pm

Mr. Gerald Howarth: My hon. Friend fairly makes the point that the scheduling committees are apprehensive about new clause 6. However, as I have already said, the chairman of the Heathrow scheduling committee feels that it would be helpful to have a provision which precludes the possiblity of future interference by airport authorities in the allocation of times for the movement of aircraft at a busy airport. I am sorry to press my hon. Friend on this matter, but it is not quite as simple as he suggested.

Mr. Spicer: Both my hon. Friend and my hon. Friend the Member for South Hams raised that point in their speeches. The fear is that the change of ownership of an airport—this is the nub of the matter—will affect the status of the scheduling committees. I can say categorically that there would be no such effect. Indeed, the backstop powers in the Bill might guarantee the preservation of the present system. Nothing in the Bill constitutes a threat to the scheduling committees.

Mr. Robert Hughes: What backstop power in the Bill provides that a private owner must retain a scheduling committee?

Mr. Spicer: The Bill gives the Secretary of State the power to make rules and establish schemes for allocating capacity at airports. I am sure we agree that, in present circumstances, scheduling committees provide a good system. If an operator did not want that system, the Secretary of State would have the power to request schemes which reflected the operations of a scheduling committee.

Mr. Adley: The crucial point is that currently the small airlines know that they can raise matters with the Minister through their Member of Parliament. The fear is that the Bill will give the Secretary of State the power to deal with macro matters, but not with matters which, although small in terms of legislation, could be vital to the lifeline of a small airline. I do not wish to be too rude to the BAA, but I do not think that representations to it would be quite the same as representations to the Minister.

Mr. Spicer: In fact, it is the other way around. Clauses 28, 29 and 30 provide backstop powers for the Secretary of State to intervene in the sorts of matters mentioned by my hon. Friend, so the Bill is sound in that way. However, it does not enshrine the rights of scheduling committees—

Mr. Bill Walker: My hon. Friend knows that I believe that there should be a system of appeal to the Secretary of State, and on that he and I are at one. Can he confirm that when the Bill becomes law there will no longer be problems with air navigation orders? As he is well aware, it took me six years to achieve change, and a company could go out of business in that time. It is important that we do not have the same problems with slots and scheduling, especially for flights from Dundee, in which I declare an interest. Can my hon. Friend assure the House that we will not face the same ghastly situation as we faced on air navigation orders when we found ourselves impotent?

Mr. Spicer: My hon. Friend may wish to return to the question of air navigation orders, and especially the question of NATCS. On 26 February I met representatives of independent airlines, when they raised the question of NATCS and air navigation orders. I look forward to hearing in more detail from the independent airlines about the precise nature of the problem. I am sympathetic to the management and accountability problems of NATCS. My hon. Friend has often made the point about dual control, and it is something that we might wish to study. We do not have that sort of duality of control in other matters—

Mr. Steen: rose—

Mr. Spicer: I am about to address myself to my hon. Friend's amendment No. 44. I do not wish to delay the House, but I shall give way to him if he wishes to question me once I have made my remarks.
The amendment takes the initiative on slot allocation schemes away from the Secretary of State and gives it to the scheduling committees. It would be wrong to do that, for at least two reasons, and there may be more. First, problems may arise if a scheduling committee is on the verge of breaking down. We have already discussed the operations of the scheduling committees where an airport

may have scarce capacity—and even, at peak moments, a complete absence of capacity—but where, taken on a broad basis, it has not reached full capacity. The scheduling committees, in their wisdom and efficiency, have the capability to spread the load and to consult.
We may eventually reach the position—the time is a matter of debate—when an airport reaches full capacity. At that point, the airlines may be incapable of voluntarily reaching an agreement, with the consequence that the mechanism breaks down. If my hon. Friend the Member for South Hams is fair, he will admit the possibility of such a circumstance. Indeed, that is why hon. Members have referred to backstop powers.
A second point which I must make relates to the question raised by my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) about whether a scheduling committee composed of independent airlines might, when capacity was used up, not always act in the public interest. It might be that the Government had policies about competition and about airlines flying in from individual regional points, and it might be that the scheduling committee was unable to cope in those circumstances.

Mr. Dicks: My hon. Friend keeps on confusing questions of definition. He mentions capacity. The problem at Heathrow is that people want to come in at a particular time. In this sense, it has nothing to do with capacity. People want come in at 10 am. A British airline wants to come in at 10 am, when there is a vacant slot at 3 pm, which is precisely the time when it wants to go back. My hon. Friend ought to differentiate clearly between the problem of capacity and the problem of the times at which an aircraft wants to come in and when it is not convenient to do so.

Mr. Spicer: I was not making any judgments about capacity. I take the point made by my hon. Friend, that there may be an opportunity to squeeze capacity into different times of the day and to generate new patterns of activity in the way that is suggested. All I would say is that, if the limit of capacity was ever reached, if there was a demand for certain times of day which were full up, it is at least conceivable that the scheduling committee approach would not be as effective as it is at present.

Mr. Steen: I would be grateful if my hon. Friend would give way before he goes further. The House is most grateful for his courtesy in giving way to his hon. Friends as often as he has done. This is a crucial point in the debate. My hon. Friend said that the time may come when the limit of capacity is reached. That is when the lifeboat picture emerges. What he is saying—is this right?—is that at the point when capacity is reached, either totally or in part, the Secretary of State will throw people out. The only people that he can throw out are British carriers, because of the bilateral agreements. That is what the House wants to know. Will he throw out British carriers?

Mr. Spicer: No. This is the question that I keep on throwing back at my hon. Friend. He throws these questions at me and I throw them back—perhaps I am not meant to do that. The question that I have been asking him is why that would be the case. He has proposed that we should enshrine the scheduling committee in legislation. Why should the safety and the future of British airlines be left more comfortably to a committee composed


of a majority of large foreign airlines than to a British Secretary of State who is answerable to the House of Commons? My hon. Friend says that he has no powers. That is precisely what the debate is about. He will have reserve powers of the kind required by my hon. Friend.
The last three amendments consist of requirements to consult the scheduling committee before any action is taken. My case against these amendments is the same as that which I used against amendment No. 44, in particular. Not only would the arrangement be very cumbersome and give the scheduling committee a consultative role which other civil aviation interests might also wish to have, but there might be a time when the scheduling committee had actually broken down and consultations might be desired about the circumstances which had led to the breakdown of the scheduling committee. In such a case, it would surely not be particularly wise to have enshrined a consultative arrangement with an organisation which had broken down.
The Government accept, as my hon. Friend the Member for Brentwood and Ongar has asked us to, the tremendous efficiency and the tried and tested nature of the scheduling committee. There is no question about that. Nevertheless, I ask that the amendments be withdrawn or, if not, resisted, because we see grave disadvantages in enshrining in statute the role of the scheduling committee.

Mr. Snape: Hon. Members on both sides of the House have expressed understandable fears about the future of the smaller airlines and the existing network, particularly via Heathrow, but also via London's other airports. Despite the length of his reply, the Under-Secretary of State has conspicuously failed to allay those fears. His failure illustrates the central flaw in the Bill. The hon. Member for Cannock and Burntwood (Mr. Howarth) wants public sector protection in what will be a private sector industry, for which he will have voted. Having voted, as have all his hon. Friends, to take the British Airports Authority and the other airports into the private sector, he now seeks safeguards which will have an impact on the profitability of the airports. The problem is that he cannot have those safeguards, because to give them—

Mr. Bill Walker: rose

Mr. Snape: I will give way in a moment. I have not said anything yet. The hon. Gentleman has.
To give those safeguards would be contrary to the whole purpose of the Bill, which is to put those airports into the private sector because it is felt that they will be run more efficiently. If they are run more efficiently, the sufferers will inevitably be the smaller airlines operating smaller aircraft, which will be less attractive commercially to a privatised British Airports Authority.

Mr. Bill Walker: Does the hon. Gentleman agree that the aviation industry is the most regulated of all, whether it is run by private or public sector airlines, and that there would be nothing odd in having a clause in the Bill which said that the British Airports Authority should not in future interrupt or prevent the work of the scheduling committee?

Mr. Snape: There might be nothing odd about it in the hon. Gentleman's view, or, for that matter, in mine, but it would be contrary to the spirit of the Bill and to the spirit which is typified by the Secretary of State for Transport.

Mr. Walker: No.

Mr. Snape: The hon. Member for Tayside, North (Mr. Walker) says no. If so, why has his hon. Friend the Under-Secretary of State not accepted the perfectly reasonable new clause moved by the hon. Member for South Hams (Mr. Steen)? We are being asked by the Minister to put the whole matter into the hands of the Secretary of State, who has indicated his way forward.
The hon. Member for South Hams expressed concern about my hon. Friend the Member for Aberdeen, North (Mr. Hughes) being a future Secretary of State for Transport. I am sure that it was not me that he meant. It is not a role that I would seek. The fact is that both he and I know, because we voted against the Secretary of State's proposals in the Civil Aviation Bill which failed to get a sittings motion in Committee in December 1984, that that is the way in which the Secretary of State would presumably wish to go forward if the difficulties so amply illustrated by the hon. Member for South Hams were to come about.
I am afraid that the Minister has palpably failed to ease the fears of hon. Members on both sides of the House. It is for the hon. Member for South Hams to say what he is going to do. Again, the Minister grins. I will give one example which, if it does not appeal to the Minister, will appeal to his hon. Friend. Last week I flew to Gatwick from Exeter in a Twin Otter of Brymon Airways. Unlike some Conservative Members, I do not profess to be an aviation expert, but it was apparent that that aircraft, trying to land at Gatwick at about 8.20 in the morning, was causing a problem because of the mix of faster aircraft that were landing.

Mr. Bill Walker: On one runway.

Mr. Snape: Yes, on one runway.
We had to circle for about 10 minutes while faster aircraft landed. If Gatwick was run by a private authority, it might say to Brymon Airways, "It would be operationally easier for us if you postponed your flight for an hour." Brymon Airways is now supported by British Airways, but a few months ago it might have gone bankrupt while three or four such decisions were being examined by the Secretary of State. We all know how slow Governments are. I am not saying that the Secretary of State is slower than anyone else. It might be better if he was, because sometimes he is apt to jump the gun. By the time decisions are taken, smaller airlines may be bankrupt.
It is for the hon. Member for South Hams to decide whether he has received an adequate reply from the Minister. I do not think he has. He made a valid point, although I appreciate the concern expressed by my hon. Friend the Member for Workington (Mr. Campbell-Savours), that good intentions are not enough to ensure the future of the smaller private companies. The Minister has palpably failed to give the necessary assurance.

Mr. Peter Fry: I apologise, Mr. Deputy Speaker, for not being here at the start of the debate, but I have been in the Select Committee on Transport. Hon. Members may recall that that Committee prepared a report, many of whose recommendations are the basis of this legislation.
I understand the concern of many of my hon. Friends about the possible dangers for civil airlines. Having listened to the hon. Member for West Bromwich, East (Mr. Snape), I am not clear whether he is in favour of the


Secretary of State having power to make a decision in this case. Perhaps he was delicately drawing a veil over that so that we would not know exactly where he stood on it.
I support the Minister's point of view. When the Select Committee considered the position of airports in the post-privatisation period, we were aware that at the moment the wider public interest is protected by the Secretary of State and by the nationalised airports authority, and that the position created by the privatisation of airports could constitute a danger to the wider public interest. Although we were impressed by the representatives of the scheduling committee who explained its role to us, and although we were also impressed by and were sympathetic to the smaller airlines, the Select Committee felt that someone somewhere had to have responsibility for the public interest post-privatisation. Therefore, we took the view that it was up to the Secretary of State, in conjunction with the Civil Aviation Authority, to have discussions in the event of an airport being very near to saturation point.
Everyone must answer one simple question. Given that we will be in a new position, whether we like it or not, who should be the custodian of the public interest? I do not see a scheduling committee of airlines as being the appropriate body for that. In the circumstances we are talking about, with an airport rapidly becoming full up, the Secretary of State would not fulfil his proper duty if he did not have a responsibility and was not prepared to act. Therefore, although I have considerable sympathy with the purpose behind the amendment of my hon. Friend the Member for South Hams (Mr. Steen), I must support the Minister.

Mr. Steen: With the leave of the House, Mr. Deputy Speaker, I want to address myself to one or two matters which have come out of this important and interesting debate which has taken some time. It is right that it should have taken so much time because it is of great significance to the future of the airline industry. I have listened to the Minister with interest and the House has the greatest respect for his approach to the Bill, but he has missed one cardinal point. If an airline wants to fly into an airport when capacity is full, it must be told that it cannot or that somebody else will be displaced.
If there is a statutory scheduling committee, its word is final. It may say, "There is no more space. The slot is already taken. You must go elsewhere." The Bill will give the Secretary of State powers to remove someone who is already there. That is different from giving the final power to the scheduling committee, made up of the airlines, which will say, "We are full on Tuesday; come back on Wednesday," or "We are full on Tuesday; go somewhere else." In the Bill the Secretary of State is being given the power to move airlines around. He must use that power, otherwise there would be no point in giving it to him. But the key to the Bill is that the only people he can move around are British carriers. The Minister has said that it may not be foreign carriers because of international agreements.
If the scheduling committee has the final word, and the Secretary of State is not involved, all airlines, whether international or British carriers, will be treated equally. If the Secretary of State has reserve power, he can move only British airlines. Many hon. Members on both sides of the House fear that that is a deficiency in the Bill. It is with the greatest and deepest regret that I must tell my hon.

Friend the Under-Secretary of State that his speech failed to address that problem. For that reason, I must push the new clause to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 126, Noes 292.

Division No. 127]
[7.30 pm


AYES


Adams, Allen (Paisley N)
Kirkwood, Archy


Alton, David
Leighton, Ronald


Ashdown, Paddy
Lewis, Terence (Worsley)


Ashley, Rt Hon Jack
Litherland, Robert


Ashton, Joe
Livsey, Richard


Atkinson, N. (Tottenham)
Lloyd, Tony (Stretford)


Bagier, Gordon A. T.
Loyden, Edward


Banks, Tony (Newham NW)
McCartney, Hugh


Beckett, Mrs Margaret
McKelvey, William


Bermingham, Gerald
McNamara, Kevin


Bidwell, Sydney
McTaggart, Robert


Blair, Anthony
McWilliam, John


Boyes, Roland
Marek, Dr John


Bray, Dr Jeremy
Marshall, David (Shettleston)


Brown, Gordon (D'f'mline E)
Maxton, John


Brown, Hugh D. (Provan)
Maynard, Miss Joan


Brown, N. (N'c'tle-u-Tyne E)
Meacher, Michael


Bruce, Malcolm
Meadowcroft, Michael


Callaghan, Rt Hon J.
Michie, William


Callaghan, Jim (Heyw'd &amp; M)
Millan, Rt Hon Bruce


Campbell, Ian
Miller, Dr M. S. (E Kilbride)


Canavan, Dennis
Mitchell, Austin (G't Grimsby)


Carlile, Alexander (Montg'y)
Morris, Rt Hon A. (W'shawe)


Carter-Jones, Lewis
Morris, Rt Hon J. (Aberavon)


Cartwright, John
Nellist, David


Clarke, Thomas
O'Neill, Martin


Clay, Robert
Park, George


Clelland, David Gordon
Parry, Robert


Cohen, Harry
Patchett, Terry


Cook, Frank (Stockton North)
Penhaligon, David


Cook, Robin F. (Livingston)
Pike, Peter


Corbyn, Jeremy
Powell, Raymond (Ogmore)


Craigen, J. M.
Prescott, John


Dalyell, Tam
Radice, Giles


Davis, Terry (B'ham, H'ge H'l)
Randall, Stuart


Dewar, Donald
Redmond, Martin


Dixon, Donald
Richardson, Ms Jo


Dormand, Jack
Roberts, Allan (Bootle)


Dubs, Alfred
Robertson, George


Evans, John (St. Helens N)
Rooker, J. W.


Ewing, Harry
Ross, Ernest (Dundee W)


Faulds, Andrew
Ross, Stephen (Isle of Wight)


Field, Frank (Birkenhead)
Sedgemore, Brian


Fields, T. (L'pool Broad Gn)
Sheerman, Barry


Fisher, Mark
Shore, Rt Hon Peter


Flannery, Martin
Short, Ms Clare (Ladywood)


Foot, Rt Hon Michael
Short, Mrs R.(W'hampt'n NE)


Foster, Derek
Smith, Rt Hon J. (M'ds E)


Fraser, J. (Norwood)
Snape, Peter


Godman, Dr Norman
Strang, Gavin


Golding, John
Thomas, Dafydd (Merioneth)


Hamilton, James (M'well N)
Thorne, Stan (Preston)


Hamilton, W. W. (Fife Central)
Tinn, James


Harrison, Rt Hon Walter
Torney, Tom


Haynes, Frank
Wallace, James


Healey, Rt Hon Denis
Wareing, Robert


Hogg, N. (C'nauld &amp; Kilsyth)
White, James


Home Robertson, John
Wigley, Dafydd


Howells, Geraint
Wilson, Gordon


Hughes, Dr Mark (Durham)
Winnick, David


Hughes, Robert (Aberdeen N)
Young, David (Bolton SE)


Hughes, Roy (Newport East)



John, Brynmor
Tellers for the Ayes:


Jones, Barry (Alyn &amp; Deeside)
Mr. Anthony Steen and


Kaufman, Rt Hon Gerald
Mr. Bill Walker.

NOES


Abse, Leo
Alexander, Richard


Aitken, Jonathan
Alison, Rt Hon Michael






Amess, David
Fraser, Peter (Angus East)


Ancram, Michael
Freeman, Roger


Arnold, Tom
Fry, Peter


Ashby, David
Galley, Roy


Aspinwall, Jack
Gardiner, George (Reigate)


Atkins, Rt Hon Sir H.
Gardner, Sir Edward (Fylde)


Atkins, Robert (South Ribble)
Garel-Jones, Tristan


Atkinson, David (B'm'th E)
Gilmour, Rt Hon Sir Ian


Baker, Rt Hon K. (Mole Vall'y)
Goodlad, Alastair


Baker, Nicholas (Dorset N)
Gow, Ian


Baldry, Tony
Gower, Sir Raymond


Batiste, Spencer
Grant, Sir Anthony


Beaumont-Dark, Anthony
Greenway, Harry


Bellingham, Henry
Gregory, Conal


Bendall, Vivian
Griffiths, Sir Eldon


Bennett, Rt Hon Sir Frederic
Griffiths, Peter (Portsm'th N)


Benyon, William
Grist, Ian


Best, Keith
Ground, Patrick


Bevan, David Gilroy
Grylls, Michael


Biffen, Rt Hon John
Hamilton, Hon A. (Epsom)


Biggs-Davison, Sir John
Hamilton, Neil (Tatton)


Blackburn, John
Hampson, Dr Keith


Blaker, Rt Hon Sir Peter
Hanley, Jeremy


Bonsor, Sir Nicholas
Hannam, John


Boscawen, Hon Robert
Hargreaves, Kenneth


Bottomley, Mrs Virginia
Harris, David


Bowden, A. (Brighton K'to'n)
Havers, Rt Hon Sir Michael


Brandon-Bravo, Martin
Hawkins, C. (High Peak)


Brinton, Tim
Hawksley, Warren


Brittan, Rt Hon Leon
Hayes, J.


Brooke, Hon Peter
Hayhoe, Rt Hon Barney


Browne, John
Heathcoat-Amory, David


Bruinvels, Peter
Heddle, John


Bryan, Sir Paul
Henderson, Barry


Buchanan-Smith, Rt Hon A.
Heseltine, Rt Hon Michael


Buck, Sir Antony
Hickmet, Richard


Budgen, Nick
Hicks, Robert


Bulmer, Esmond
Higgins, Rt Hon Terence L.


Butcher, John
Hill, James


Butler, Rt Hon Sir Adam
Hind, Kenneth


Butterfill, John
Hogg, Hon Douglas (Gr'th'm)


Carlisle, John (Luton N)
Holland, Sir Philip (Gedling)


Carlisle, Kenneth (Lincoln)
Holt, Richard


Carlisle, Rt Hon M. (W'ton S)
Hordern, Sir Peter


Carttiss, Michael
Howard, Michael


Cash, William
Howarth, Alan (Stratf'd-on-A)


Channon, Rt Hon Paul
Howell, Rt Hon D. (G'ldford)


Chapman, Sydney
Howell, Ralph (Norfolk, N)


Chope, Christopher
Hubbard-Miles, Peter


Churchill, W. S.
Hunter, Andrew


Clark, Hon A. (Plym'th S'n)
Irving, Charles


Clark, Sir W. (Croydon S)
Jackson, Robert


Clarke, Rt Hon K. (Rushcliffe)
Jenkin, Rt Hon Patrick


Cockeram, Eric
Jessel, Toby


Colvin, Michael
Jones, Gwilym (Cardiff N)


Conway, Derek
Jones, Robert (Herts W)


Coombs, Simon
Joseph, Rt Hon Sir Keith


Cope, John
Kellett-Bowman, Mrs Elaine


Couchman, James
King, Roger (B'ham N'field)


Cranborne, Viscount
King, Rt Hon Tom


Currie, Mrs Edwina
Knight, Greg (Derby N)


Dickens, Geoffrey
Knight, Dame Jill (Edgbaston)


Dorrell, Stephen
Knowles, Michael


Douglas-Hamilton, Lord J.
Knox, David


Dover, Den
Lamont, Norman


du Cann, Rt Hon Sir Edward
Lang, Ian


Dunn, Robert
Lawler, Geoffrey


Dykes, Hugh
Lee, John (Pendle)


Eyre, Sir Reginald
Leigh, Edward (Gainsbor'gh)


Fairbairn, Nicholas
Lennox-Boyd, Hon Mark


Farr, Sir John
Lewis, Sir Kenneth (Stamf'd)


Favell, Anthony
Lightbown, David


Fenner, Mrs Peggy
Lilley, Peter


Finsberg, Sir Geoffrey
Lloyd, Peter (Fareham)


Fletcher, Alexander
Lord, Michael


Fookes, Miss Janet
Lyell, Nicholas


Forth, Eric
McCurley, Mrs Anna


Fowler, Rt Hon Norman
Macfarlane, Neil


Fox, Marcus
MacKay, Andrew (Berkshire)


Franks, Cecil
McNair-Wilson, M. (N'bury)





McNair-Wilson, P. (New F'st)
Shaw, Sir Michael (Scarb')


Major, John
Shelton, William (Streatham)


Malins, Humfrey
Shepherd, Colin (Hereford)


Malone, Gerald
Shepherd, Richard (Aldridge)


Maples, John
Shersby, Michael


Marland, Paul
Silvester, Fred


Marlow, Antony
Sims, Roger


Mather, Carol
Skeet, Sir Trevor


Maude, Hon Francis
Smith, Tim (Beaconsfield)


Mawhinney, Dr Brian
Soames, Hon Nicholas


Maxwell-Hyslop, Robin
Speed, Keith


Mayhew, Sir Patrick
Spencer, Derek


Mellor, David
Spicer, Jim (Dorset W)


Meyer, Sir Anthony
Spicer, Michael (S Worcs)


Miller, Hal (B'grove)
Squire, Robin


Mills, Iain (Meriden)
Stanbrook, Ivor


Mills, Sir Peter (West Devon)
Stanley, Rt Hon John


Mitchell, David (Hants NW)
Stern, Michael


Moate, Roger
Stevens, Lewis (Nuneaton)


Monro, Sir Hector
Stewart, Allan (Eastwood)


Montgomery, Sir Fergus
Stewart, Andrew (Sherwood)


Moore, Rt Hon John
Stewart, Ian (Hertf'dshire N)


Morrison, Hon C. (Devizes)
Stokes, John


Morrison, Hon P. (Chester)
Stradling Thomas, Sir John


Moynihan, Hon C.
Sumberg, David


Mudd, David
Tapsell, Sir Peter


Neale, Gerrard
Taylor, John (Solihull)


Nelson, Anthony
Taylor, Teddy (S'end E)


Neubert, Michael
Tebbit, Rt Hon Norman


Newton, Tony
Temple-Morris, Peter


Nicholls, Patrick
Terlezki, Stefan


Norris, Steven
Thatcher, Rt Hon Mrs M.


Oppenheim, Phillip
Thompson, Donald (Calder V)


Oppenheim, Rt Hon Mrs S.
Thompson, Patrick (N'ich N)


Ottaway, Richard
Thorne, Neil (Ilford S)


Page, Richard (Herts SW)
Thornton, Malcolm


Parris, Matthew
Thurnham, Peter


Patten, Christopher (Bath)
Townend, John (Bridlington)


Patten, J. (Oxf W &amp; Abgdn)
Townsend, Cyril D. (B'heath)


Pattie, Geoffrey
Trippier, David


Pawsey, James
Trotter, Neville


Peacock, Mrs Elizabeth
Twinn, Dr Ian


Percival, Rt Hon Sir Ian
van Straubenzee, Sir W.


Pollock, Alexander
Vaughan, Sir Gerard


Portillo, Michael
Viggers, Peter


Powell, William (Corby)
Wakeham, Rt Hon John


Powley, John
Waldegrave, Hon William


Prentice, Rt Hon Reg
Walden, George


Price, Sir David
Wall, Sir Patrick


Proctor, K. Harvey
Waller, Gary


Pym, Rt Hon Francis
Walters, Dennis


Raffan, Keith
Ward, John


Rathbone, Tim
Wardle, C. (Bexhill)


Rees, Rt Hon Peter (Dover)
Watts, John


Renton, Tim
Wells, Sir John (Maidstone)


Rhodes James, Robert
Wheeler, John


Rhys Williams, Sir Brandon
Wiggin, Jerry


Ridley, Rt Hon Nicholas
Wolfson, Mark


Roberts, Wyn (Conwy)
Wood, Timothy


Robinson, Mark (N'port W)
Woodcock, Michael


Roe, Mrs Marion
Yeo, Tim


Rossi, Sir Hugh
Young, Sir George (Acton)


Rowe, Andrew
Younger, Rt Hon George


Rumbold, Mrs Angela



Ryder, Richard
Tellers for the Noes:


Sackville, Hon Thomas
Mr. Tim Sainsbury and


Shaw, Giles (Pudsey)
Mr. Tony Durant.

Question accordingly negatived.

New Clause 7

PROVISION OF SERVICES AND FACILITIES

It shall be the duty of every person who is:—

(a) the successor company;
(b) a public airport company for the purposes of Part II of this Act; or
(c) the operator of an airport licensed for public use under an Air Navigation Order, to provide at each airport of


which he is the operator such services and facilities (not being air navigation services) as are in his opinion necessary or desirable for its operation having regard to the development of air transport and to the efficiency, safety and economy of operation.'.—[Mr. Steen.]

Brought up, and read the First time.

Mr. Steen: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it will be convenient to discuss the following: amendment (a) to new clause 7, in line 6, leave out 'in his opinion'.

New clause 9—Provision of new airport facilities—

'(1) In order to encourage provision of sufficient new airport facilities to meet demand, such facilities may be provided either by successor companies to the BAA or public airport companies as defined in Clause 15, or by other companies or organisations; and any such new facilities must have been approved in accordance with planning regulations and when necessary have received approval from the Secretary of State as suitable to provide necessary additional airport capacity in the national interest.
(2) The airport operator must provide fair and reasonable access to the runways, taxi-ways, roads, lands, safety services and other essential ancillary services at an airport, from all terminals and airport facilities serving that airport at a reasonable cost.
(3) In the event of a dispute between the airport operator and the provider of any such facility the Secretary of State will have the power to determine fair and reasonable access to the runways and other essential services.'.

Mr. Steen: We have already had a formidable debate on a matter of great public interest, but this issue is equally important. The new clause is designed to help the Government with a drafting difficulty that they are probably unaware of. It flows from the belief that if the Bill is left unamended, a new airport operator could build a housing estate there. A new operator could, indeed, sell off the land for agriculture or development, which is, I believe, inconsistent with running an airport. Clause 73(5) and part I of schedule 5 would revoke in its entirety the Airports Authority Act 1975. There is no provision in the Bill to replace the BAA's duty under section 2(2) of that Act to provide services and facilities for the airport's operation. In consequence, the successor company defined in clause 72(1) as being
the company nominated for the purposes of section 2"—
that is, the company in which the property, rights and liabilities of the BAA will vest—will be under no corresponding duty to provide services and facilities, and will be able to dispose of the land currently used for airports and runways for other, perhaps more lucrative, purposes.
I hope that the Government understand why we felt it our duty to prevent them being severely embarrassed upon finding that Heathrow or Gatwick had become private housing developments, hypermarkets, supermarkets or agricultural land. New clause 2 would impose on the successor company, on public airport companies to which municipal airports may be transferred, and on aerodromes licensed for public use under the air navigation order, an obligation to provide such services and facilities as are, in the opinion of the operator of the airport, necessary or desirable for its operation, having regard to the development of air transport, and to the efficiency, safety, and economy of operation. Those last few words are important. We are introducing criteria whereby that

operation must be efficient, safe and economic. The important factor is that the airport operator is not obliged to apply for a licence for public use—that is, one that requires him to make the airport available, when it is in use, to all comers on equal terms—although if he does not do so, the CAA may refuse to grant him a licence for private use.
An aerodrome licence is required under the present Air Navigation Order 1985, part IX, Statutory Instrument No. 1643, for flights for the purpose of public transport—that is, for reward—or for instruction in flying. The concept of the licence for public use could be abolished by amending the air navigation order, subject to the negative resolution procedure.
The new clause is very interesting, and I am sure that my right hon. Friend the Secretary of State will be glad to have it in the Bill. He and his officials may not realise that the new airports authority—I know that my right hon. Friend will correct me if I am wrong—has said that, when Heathrow is privatised, it will buy up houses that are affected by noise. That is also true of Gatwick and other airports. Indeed, it is a credit to the Government that they have persuaded those people to be environmentally sensitive and to buy up houses that are adversely affected by noise. However, as a result of new stringent regulations and developments in air traffic noise, there is now, and will increasingly be, much less noise than years ago.
But once the airport authority has bought up the houses at a knockdown price because of the level of noise, it will have gone into the property market. It will buy houses around the airport, and if it is a good private concern, it will find that is is saddled with houses that are not commercially viable. Although it may sound far-fetched, as drafted, there is nothing in the Bill to prevent an airport authority deciding that the only way of dealing with a lot of loss-making houses on the outskirts of the airport and getting them back to a proper market value is by converting the whole or part of that airport into a private housing development, a supermarket or an office development. In that way, the houses would rise in value as the airport nuisance element receded.
I seek only to help the Government over a drafting deficiency. I hope that my right hon. Friend the Secretary of State will see it in that light. Of course, he may say that it is all very well dealing with hypotheses. Indeed, he may say that new clause 6 dealt with a hypothesis because airports are not yet full, and may never be. But the hypothesis in this case is that the power in the Bill would allow an authority to do something other than run an airport.
7.45 pm
My right hon. Friend the Secretary of State may say that there would have to be a planning appeal before there was any change of use from an airport to a housing estate. That may be true, but what would happen if the new airport owners decided that a housing development was more lucrative, went to the planning department of a local council and was granted planning permission? There is no right of appeal, unless the Secretary of State believes that he can call it in.
The new clause is designed to help my right hon. Friend to ensure that airports are run as such. Moreover, and more importantly, it ensures that they will not be run casually, but with the specific aim of being efficient, effective, safe and economic. I hope that my right hon. Friend the


Secretary of State will find much to commend in the new clause. However, if it is not drafted to his liking, I hope that he will feel that there is some advantage in including something similar in the Bill.

Mr. Toby Jessel: I hope that the House will decisively reject the new clause. It may be, as my hon. Friend the Member for South Hams (Mr. Steen) has suggested, that the housing point is uppermost in his mind, but it is not very likely that an airport authority would build a housing estate in the middle of an airport. However, the new clause could open the door to something far more sinister.
I invite the House to reconsider the text of new clause 7. It says:
It shall be the duty of every person who is …
(c) the operator of an airport licensed for public use … to provide at each airport … such services and facilities … as are in his opinion necessary or desirable for its operation having regard to the development of air transport".
That would impose a duty on airport operators to meet the demand for unlimited expansion of an airport, or so it could be argued in a court of law. At Heathrow, that could, of course, include a fifth terminal. But I remind the House that, after a full debate on Monday 17 June 1985, the House voted decisively by 326 votes to 190 to endorse the decision of my right hon. Friend the Secretary of State for Transport and my right hon. Friend the Secretary of State for the Environment, which had been announced by my right hon. Friend the Secretary of State for Transport on 5 June, to allow for a modest expansion of Stansted while refusing planning permission for a fifth terminal at Heathrow. Therefore, if the House were to accept this clause it could potentially drive a coach and horses through the previous decision of the House. I hope the clause will be rejected decisively.

Mr. McCrindle: I wish to speak to my amendment (a) which proposes to delete the words "in his opinion" from new clause 7. I agree with the broad thrust of new clause 7. I listened with great care to the points made by my hon. Friend the Member for South Hams (Mr. Steen) in moving the new clause. My objection to the new clause is that it is altogether too prone to accept what effectively the British Airports Authority is prepared to dole out. I point out as strongly as I can that the aim of my amendment is to establish real consultation between the providers and users of the services at airports. At present, under the new clause, there seems to be a considerable element of imposition of services at whatever level and to whatever degree the airports believe to be necessary.
Surely the airlines must be concerned with the number, level and quality of services provided. Surely it is not asking too much that the airlines, as the users of the facilities at airports, must be invited to have an input concerning the level of services that they believe are required to enable them to develop air transport. It is not good enough for the airports to provide only those services that the airport authority has decided, without formal consultation, are adequate for the purpose.
Ideally, there should be a partnership between airports and airlines in deciding the appropriate level of services. That presupposes that the terms of the partnership are laid down. As I said earlier, I am concerned that new clause 7, as the basis of that partnership, tends to impose the requirements at the level the airports decide. Because the airlines are, frankly, suspicious of the new regime to

which we are now moving, the time has arrived, and the Bill gives the opportunity, to ensure that there is no doubt in anyone's mind that meaningful consultation is being sought.
Briefly, my amendment seeks to achieve the formalising of the consultative procedure. When the Bill was before the House on Second Reading, I intervened during the speech of my right hon. Friend the Secretary of State to intimate my concern that the consultation process provided for was perhaps a little too informal. He may recall that he said then that it did not matter too much to him whether it was formal or informal. With the greatest respect, I think that it does matter, and my amendment provides the opportunity for a rather more formalised basis of consultation. I commend it to the House and to the Secretary of State for consideration.

Mr. Bill Walker: I will concentrate on new clause 9, which stands in my name and that of my hon. Friends and which deals with the provision of new airport facilities.
It is no secret that, once the British Airports Authority is in the private sector—and I heartily approve of that—it will no longer be under any statutory duty to meet demands. The first responsibility of the private airport owners will properly be to their shareholders, and I do not argue with that. In a private monopoly—that is what they will be—the shareholders' interests may best be served and the risk to shareholders' funds minimised, in the absence of any threat of competition, by not providing additional capacity until the demand clearly exceeds existing facilities; in other words, action will be delayed until it must be taken. The airport owners, by meeting the shareholders' interests—the interests of the consumers and the aircraft industry—might be compromised and the competitive position of the United Kingdom weakened.
On the matter of competition, I have been motivated by the thinking and writing of my right hon. Friend the Secretary of State. Therefore, on this subject, I would expect him to understand clearly what I am saying. If new clause 9 were accepted it would enable companies, other that the airport owner, to provide facilities to meet demand on conditions that allowed the companies fair and reasonable access to the essential facilities of airports, such as runways. The provision of terminal facilities, for example, other than by airport owners works well and efficiently in the United States, and this applies to the British Airways—owned and operated terminal at John F. Kennedy airport in New York.
My right hon. Friend will remember the morning when I was delayed in Washington and unfortunately was not able to hear what he said in relation to British Airways and its operations at its New York terminal. He will recollect that, on Tuesday 28 January, he said that British Airways had not particularly enjoyed having its own terminal at JFK in New York. My right hon. Friend will know that British Airways disputes that; it says that it places great value on having its own terminal at this major airport. It enables it to handle arrivals and departures flexibly. It helps it to provide a better service to customers.
The facilities have recently been modernised, and passengers are benefiting and staff enjoy working in them. The marketing of the British Airways product in the United States is in keeping with the refurbishing cost of $16 million. The terminal has assisted British Airways to get its message across in the United States. The main


competitors of British Airways in New York are Pan American and Trans World Airways and they also operate services from their own terminals and extensively advertise the convenience that this affords.
My right hon. Friend will also be aware that at many other airports in the United States as well as John F. Kennedy there is a similar situation. It was suggested in Committee that the New York airport authority would, at this stage, not be happy about airlines having their own terminals. I was surprised when I read those comments. I was not present when they were made, so I checked the situation myself. There is no doubt that the present policy of the New York authority is to encourage airlines to finance the terminal facilities at its airports, which include all the airports covered by the New York authority. However, the present director of the authority may have personal views not in keeping with the policy that the authority is exercising.

Mr. Stephen Ross: As a member of the Select Committee, I went to all three of the airports in New York run by the authority. The impression given to the Select Committee was that the authority would not go down that path again.

Mr. Walker: I am not questioning that; I am saying that I have subsequently checked the statements made. The report I have from the New York authority is that its policy is to lease out terminals and terminal facilities. It has recently awarded new leases to airlines, one of which is the British Airports Authority, which has just had its lease renegotiated. That is the current policy of the airport authority. It also says that Pan Am did its own financing and TWA sub-leased back from Pan Am. In addition, British Airways, United Airlines, American Airlines, Eastern Airlines, and North West Orient all do their own financing. That happens at JFK airport. At La Guardia, which is also an airport authority airport, Delta Airlines has recently financed a new terminal. At Atlanta the same situation applies.
I will not bore the House with all the details, but I have them in relation to all the major airports in the United States, and the information shows clearly that in places such as Los Angeles, which I understand my hon. Friend the Under-Secretary visited, new terminals are operated by a consortium of international airlines. A United Airlines terminal is privately financed. Terminal 1 is financed by Lockheed. There is no question but that the major airports of the United States and the world's busiest airport—Chicago—have terminals run by private funds, most of which come from airlines. There are key examples of airlines being committed to managing their facilities and often providing their own finance. Their success can be seen by the fact that others have been encouraged to follow suit.
All the major airports in the United States do this. The benefits are there for everyone to see. The economies which are the natural result of private enterprise produce action. Government expense is reduced and operating efficiency is improved. No deterioration in airline access has occurred. In fact, the opposite has happened. There has been a proliferation of new airlines in the United States. I am sure that when the Select Committee was over there, it was impressed. Under deregulation, there has

been an enormous expansion in new airlines and not one new carrier has failed to gain access to a suitable terminal at major airports.

Mr. Fry: Can my hon. Friend tell us how many British airlines have told him that they would like to build their own terminal?

8 pm

Mr. Walker: I cannot comment on these matters, as they may be regarded as confidential, but I can say that more than one has expressed an interest. I hope that my hon. Friend now realises that airlines are interested in being associated with and involved in the construction and running of airline terminals. I am not authorised by the airlines to say more. Airlines would wish to operate terminals if the facilities were not provided. They would build terminals, not for the sake of it, but only if it would help them run their businesses.
In Committee, there was some comment about British Airways not knowing how to run the terminal, and asking the British Airports Authority for advice. I am sure that my right hon. Friend will agree that that is not true. A senior member of British Airways invited British Airports Authority involvement in one aspect of the operation of the new terminal at John F. Kennedy airport. It is sensible to seek help from an expert.
On the matter of the 17 cargo sheds at Heathrow, it was suggested in Committee that British Airways had prevented others from having access to the sheds. British Airways had only one of the cargo sheds—all the others were leased by other airlines. There is no question of one airline adopting a dog-in-the-manger attitude. The British Airports Authority had to build another cargo shed, but that is no reason for rejecting the new clause. The airlines will build a terminal or other facility only if they believe they need it and can make it work cost-effectively and profitably. They do not build for the sake of it.
Additional facilities must be provided. We must consider whether the British Airports Authority, after it is privatised, feels that there is a need, particularly at Heathrow and Gatwick, where there will be enormous pressure. The easy option is to divert traffic to Stansted. If that happens, the new clause is necessary, so that airlines, or anyone else who wishes, can provide new facilities such as terminal facilities to meet demand. That would be helpful and would remove the present monopoly.
My right hon. Friend believes in competition and will, I am sure, see the advantages of new clause 9. It will galvanise the airport owner to provide sufficient capacity in time. As I have always argued when we debate air traffic navigation orders, there would have been proper consultation if the House had had the opportunity to pray against those orders. The right to pray against them would create the conditions in which consultations would be effective. Airport owners are required by statute to provide sufficient capacity, but, after privatisation, the Government will have no control over the new owner's capital spending. Without new clause 9, the Government's ability to influence capacity provision will be much reduced. I hope that my right hon. Friend will accept the new clause because it will help us to provide the necessary facilities in time.

Mr. Adley: My hon. Friend the Member for Tayside, North (Mr. Walker) has a slightly rosy view of the Bill.


My right hon. Friend the Secretary of State believes in competition, but not if extra competition interferes with the maximisation of revenue for the Treasury from the privatisation of the BAA. That is one of the problems that lie at the heart of the Bill.
There are three views of the Bill, two of which are dogmatic. We have the Opposition's view that public ownership is the answer to everything, and we have my right hon. Friend's view that unrestrained private trading is the only solution for the nation's problems, provided of course that we do not allow too much competition, which would reduce the value of the product that we are selling off. The new clauses in this group tend to reflect the views of some of us who support the proposition, but worried about some of the details.
In the previous debate the hon. Member for West Bromwich, East (Mr. Snape) suggested to my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) that there was incompatibility between a legislative framework and a private sector company with public sector responsibilities created by such a framework. I utterly reject that view. Anyone who has read the history of the Great Western Railway knows that it is perfectly possible to have a company in the private sector which is heavily encompassed with public sector responsibilities laid on it by the House.
I shall support the new clauses, partly because of the duty-free shops at our airports. They seem to be virtually a licence to print money. When I go through Heathrow and buy perfumes for my wife, I find that the prices there are about the same as those at Fortnum and Mason.

Mr. Couchman: Does my hon. Friend shop there?

Mr. Adley: Yes.
If my right hon. Friend is not willing to accept the new clauses or the amendment, I hope that he will consider sympathetically in another place the proposition that it is desirable to encourage a little more competition, even if we may have to accept a slightly lower price for the privatisation of the BAA.

Mr. James Hill: We all know that poorly drafted legislation can create a bonus for the legal profession. It worries me that, if my right hon. Friend the Secretary of State accepts new clause 9, an impression, which the barristers would be only too pleased to argue from now to domesday, would be created. I do not fully understand the phrase
airport capacity in the national interest.
That will be a difficult concept to argue. The new clause states:
The airport operator must provide fair and reasonable access.
He is in the business of providing access to runways. As everyone who has been in the airline business will know, he probably provides more access to runways than he does to duty-free shops. The airport operator must not only provide fair and reasonable access to runways, but all these extra facilities must be provided at a reasonable cost. That may lead to a vast argument between the operators and the private owner of the airport.
The penultimate line shows that my right hon. Friend the Secretary of State
will have the power to determine fair and reasonable access to the runways.
That will be terribly difficult to define.
I hesitate not to support the new clause. My hon. Friend's heart is in the right place. He wants privatisation, but he wants it to be hedged with many minor regulations. The free port of Southampton is an example of how regulations can destroy almost anything. I shall be extremely interested to hear what my right hon. Friend the Secretary of State has to say, but the new clause is too woolly for the House—

Mr. Bill Walker: I trust that my hon. Friend has read the Bill carefully. He must realise that parts of the new clause are taken from the Bill. If it is too woolly and couched in the wrong language, something must be fundamentally wrong with the Bill. Had my hon. Friend followed our earlier debates and understood what was meant by reasonable access to runways and other essential facilities, he would know that we were talking about aircraft being told to taxi from new terminals over taxiways to runways. If we built a new terminal at Heathrow, there would be no guarantee of access to the taxiways and runways.

Mr. Hill: I sometimes listen to my hon. Friends with wonder. The development of terminal 4 at Heathrow has meant that crossing over to active runways will be one of the most hazardous activities for pilots. Fair and reasonable access to runways is not always provided. That is a matter for the operator of the airport. It is not for my right hon. Friend to provide an inspectorate to make daily checks on large firms to see whether they provide fair and reasonable access. In practical terms, that will not work.
Whatever one may say about "a reasonable cost", which my hon. Friend did not mention, I must point out that anyone's figure could be a reasonable figure of cost. The barristers will love new clause 9, if it is accepted, because they will argue for ever more about every decision that the Secretary of State or an airport operator makes.

Mr. Alan Haselhurst: I wish to speak briefly, more in the spirit of my hon. Friend the Member for Christchurch (Mr. Adley) than in the narrow legalistic sense of my hon. Friend the Member for Southampton, Test (Mr. Hill). My hon. Friend the Member for Test was a little less than fair. We have been discussing the broad spirit of some principles of the Bill. Conservative Members are amateur draftsmen. Their amendments and new clauses are proposed as a vehicle for ideas which we commend to the Secretary of State. If the Secretary of State is impressed by those ideas, he may wish to put his draftsmen to work to ensure that they are properly encapsulated in the Bill.
My main point is that the Bill provides considerable powers for the British Airports Authority and it is not unreasonable that it should have duties placed upon it and that there should be every protection for people who may wish to have access to the facilities that we are delivering over to a private body—the British Airports Authority—after the Bill has reached the statute book.
Therefore, I do not dismiss entirely the importance of new clause 7, although I would not go as far as my hon. Friend the Member for South Hams (Mr. Steen) in supposing what could happen. It is reasonable to assume that the operators of Heathrow or Gatwick could, within present planning regulations, have the freedom to build two or three warehouses without their coming within the criteria for being called in, as the criteria have generally been operated until now. Of course, it may be fanciful to


suggest that they would operate that freedom wildly and irresponsibly, but it is possible and we are here to ensure that there is proper protection. Therefore, it is reasonable to place a duty on the operators of the airports that we are handing over to the private sector to provide the services that are an essential part of an airport.
8.15 pm
On possible competition—this may cause my hon. Friend the Member for Twickenham (Mr. Jessel) to jump up and down in great excitement, but I say it purely illustratively—it is well known that a private consortium exists which would be interested in developing the Perry Oaks site at Heathrow. If that body were not the British Airports Authority, it could build a terminal without planning permission, but it would never obtain the agreement of the BAA, as the owner of Heathrow and its runways, to have access to those runways. It is reasonable to expect an opening to be retained in the statute should that happen, whether at Heathrow or anywhere else. It should be possible for a competitive operator of a terminal not to be squeezed out simply because the owner of the runways says, "I will not have you at my airport." I hope that my right hon. Friend will not cast that consideration aside. There must be no danger of excluding that possibility of competition.

Mr. Fry: My hon. Friend the Member for Tayside, North (Mr. Walker) quoted extensively from experience in the United States. The Select Committee discovered, when it visited the United States and investigated the matter, that much of the ownership of terminals is associated with the hub principle of American airlines. Large American airlines use specific cities. In Atlanta, for example, Eastern and Delta own the two terminals, and it is accepted as their territory. I am sure that, despite what he said, my hon. Friend would not deny the enormous advantage that that gives to the airlines which use that hub. That would be a major departure in Britain. I remind him that British Airways has not been given exclusive use of terminal 4 at Heathrow—

Mr. Dicks: Shame.

Mr. Fry: That may be, but as a matter of policy that is the decision.
I have some sympathy with my hon. Friend the Member for Tayside, North when I consider Glasgow. Glasgow airport is interesting because it has no freight facilities. If Glasgow and Prestwick were not under the same ownership, one wonders whether Glasgow would continue to have no freight facilities. If it did, there might be an end to Prestwick. There is some merit in my hon. Friend's proposals and some points for my right hon. Friend the Secretary of State to consider.
After listening to some of the speeches of my hon. Friends, I begin to wonder how far they want to whittle down the value of the BAA before we sell it. My hon. Friend the member for Christchurch (Mr. Adley) said tht fewer duty-free articles should be sold. Does he realise how much of the revenue of the BAA comes from duty-free goods? If we abolished duty-free goods and made it difficult to make large profits from that source, the airlines would complain about increased landing charges.

Mr. Adley: They would be happier on safety grounds.

Mr. Fry: Perhaps, but there would be complaints.
There would be difficulties with foreign countries and airlines. We should not under-estimate the contributions that duty-free shops and other franchises make to the finances of the BAA.

Mr. Adley: If my hon. Friend talked to representatives of the airlines, he would find that they would be delighted to have the opportunity to fly without having to carry large quantities of highly explosive alcohol on board for their customers. As the Bill stands, without any seeming control there is the danger that what happens in my constituency could happen at BAA airports. For example, Hurn airport is operated by the airport management committee, without any regard to Christchurch council as the planning authority. In planning use terms, the committee allowed factories, which were previously owned by British Aerospace for the purpose of building aeroplanes, to be converted into warehouses for storing EEC grain. That change of use took place without any application to the planning authority. That is an example of the sort of thing that is worrying us.

Mr. Fry: If I read the wording of the new clause correctly, it would be necessary for planning approval to be given for someone to build a terminal. In such circumstances, can one imagine some local authorities being happy to give planning permission? I do not know whether that would be in the interests of the airport as a whole or of the airport users. I am commenting on the way in which the clause has been presented.
If we continue to whittle away the saleable value of the authority, we shall not realise anything like the amount that has been expected. I understand the worries of my hon. Friends, but the sum that will be realised is already somewhat lower than was expected originally. I believe that the Government are right to say that they want to offer to the public—to those who wish to buy shares—something of comparable value to what had been expected. If we continue to pass amendments or new clauses that reduce the value of the authority, we shall defeat one of our main purposes.

Mr. Haselhurst: Does my hon. Friend believe that our main objective should be to achieve the maximum value for the authority or to ensure that we create a regime that is in the interests of British civil aviation?

Mr. Fry: Naturally, I think that our priority should be the latter. One can go only so far in that direction. If we continue to bring up ideas, such as those which are canvassed in new clause 9, anyone who obtains planning permission will be able to do virtually anything and have automatic access to an airport.

Mr. Bill Walker: My hon. Friend is being unrealistic if he believes that there are people throughout the world who are determined to build terminals or any other facilities without being absolutely sure that they will obtain a return for their money. Those who will be interested are hard-nosed speculators and investors. We know that airlines are having some difficulty nowadays in making profits and there will be a wish to ensure that what they are doing is necessary and will provide a return. If I may say so, I find my hon. Friend's frivolous approach to serious matters rather disturbing.

Mr. Fry: On the contrary, my approach is not frivolous. Has my hon. Friend not seen large office blocks in our cities standing empty? Many of those blocks remain


empty for a long time after erection. If it is assumed that there is a great deal of money to be made from the development of airports, some people will develop them. However, the developments will not necessarily be utilised immediately. I assure my hon. Friend that my approach is not frivolous.

Mr. Wilkinson: I should like to reinforce the arguments advanced by my hon. Friends the Members for Saffron Walden (Mr. Haselhurst) and for Tayside, North (Mr. Walker). The concern of many of my hon. Friends is that the long-term economic potential benefit which could accrue to Britain through the fullest use of its civil air transport infrastructure—airports and associated facilities—should not be diminished by its development for other purposes for short-term financial gain.

Mr. Fry: I do not deny that. I am saying that new clause 9 would not achieve what my hon. Friend wants. I think that I have spent more time responding to interventions than in proceeding with my speech.
I understand the concerns that have been expressed. The new clause has provided a vehicle for the expression of those concerns, and I hope that my right hon. Friend the Secretary of State will respond to them. However, I do not feel that I can support the new clauses. As I said in responding to the speech of my hon. Friend the Member for Twickenham (Mr. Jessel), I believe that amendment (a), tabled by my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), would make matters worse. It would put an onus upon any airport owner to extend an airport if there were any demand for extra use. That would be an exceedingly dangerous line to follow.
I am aware that we are trying to create a framework for airports that is in the national interest, and we must decide who is the best custodian of the national interest. In the last resort, I believe that responsibility must lie with the Secretary of State. I cannot, therefore, support the new clause.

Mr. Robert Hughes: I hesitated before deciding to intervene in the debate. There has been a family argument among Conservative Members, and some of their interventions have been astonishing when one remembers that they all trooped into the Aye Lobby to support the Bill's Second Reading. They were enthusiastic in their support of a measure to privatise the BAA. Yet all that we have heard throughout the evening has been one Doubting Thomas after another describing the fragility of the entire exercise and arguing that a private company cannot be trusted to do the job which the Secretary of State seeks to allow it to do.

Mr. Dicks: With great respect, the hon. Gentleman's description of the debate is a travesty. On Second Reading many of us expressed concern and great doubt about the BAA's ability to do anything right. To suggest that Conservative Members who supported the principle of privatisation walked through the Aye Lobby on Second Reading while supporting the authority's activities is a travesty of what took place on that occasion.

Mr. Hughes: I absorb the hon. Gentleman's intervention. I absolve him from my general accusation that Tory Members walked through the Aye Lobby enthusiastically on Second Reading. I accept that he was dragged through the Lobby kicking and screaming by the Whips.
The principle of the privatisation of the BAA. as enshrined in the Bill, has been challenged by every hon. Member who has spoken in the many debates that have taken place this evening. The hon. Member for Tayside, North (Mr. Walker) has the greatest suspicion that the new owner—he was not speaking about the management and we do not know who the new owner will be—of the BAA will allow terminal capacity to drag against demand to such an extent that it will allow a competitor to move in and provide facilities. Other Conservative Members say that the problem is to ensure competition and that the operation must be directed to the maximising of profits while responding to the public interest.
Terminals make money because, while waiting to join their flights, passengers use the franchise shops and duty-free shops. No money is made merely by passengers passing through terminals in the course of joining their flights. No money is to be made merely by providing runways, taxiways and shelters for those boarding aircraft or disembarking from them. Conservative Members are realising more and more that the Bill is nonsense.
If the subsequent owners of the BAA airports or local authority airports are to maximise profits, they will do so only by concentrating on non-landing charges. They will provide terminals as and when there is perceived demand. They will not start to build a terminal with the unlikely prospect that in 10 years more people will be using the airport. They will look to capacity, demand and projections. If we go through the procedure of a public inquiry—no one suggests that the public inquiry procedure should be dropped—it will take about 15 years from deciding to build a new terminal to its being in operation. The time scale might be a little shorter.
Neither of the new clauses will make any difference to what will happen in the future. I accept that they have been put forward to float ideas. The ideas have been floated, and in my view they have sunk.

Mr. Ridley: The two new clauses are slightly different in content and I shall discuss them separately. I should like to pick up the point made by my hon. Friend the Member for Southampton, Test (Mr. Hill) who, quite professionally, destroyed the drafting of new clause 9. My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) quite correctly said that it is not the drafting we are worried about but the principle. That may be perfectly right in relation to new clause 9 but the drafting of new clause 7, which my hon. Friend the Member for Southampton, Test could also have dealt with, leaves more than detail to be cured by the skill of the draftsman. It exposes the very difficulties which my hon. Friend the Member for South Hams (Mr. Steen) is encountering. They are not drafting difficulties, but difficulties of substance. Although my hon. Friend the Member for South Hams makes a brave attempt to impose a duty on airport operators to provide capacity and adequate services, he has no means of saying how much capacity or how adequate the services should be. We cannot ride out of that difficulty on the skill of the draftsman.
Looking at the practicality of the duty which my hon. Friend the Member for South Hams wishes to put on airport operators, its fulfilment may not be within an airport operator's power. He may be unable to obtain


planning permission for a development which he considers necessary, or he may be unable to obtain finance for a new facility which he considers necessary.
How is a breach of such a duty to be judged? There are no objective criteria for the courts to apply. What sanctions could be applied? One could not have a court requiring a certain extra terminal to be built as part of the judgment as to whether the law that my hon. Friend proposes has been complied with. I shall take the notorious example of Stansted. I happen to believe that a limited expansion at Stansted is necessary. My hon. Friend the Member for Saffron Walden has consistently and courageously fought the opposite case—that no development, or much less development, was needed at Stansted. Will the dispute between us be arbitrated by a court? It is not a proposition that my hon. Friend the Member for South Hams could believe to be correct.

Mr. Haselhurst: I cannot let that aside go without comment. I have always argued in favour of limited expansion at Stansted. The argument has been about the degree.

Mr. Ridley: I accept that. The question is how limited is limited. We have a different view of the word. I cite that only as an example of how difficult it is to decide what capacity is necessary and to show that this is not a justiciable matter.
The new clause contains the phrase "in his opinion"—that is, the opinion of the operator. If we are to rely on his opinion he will always say, "Yes, it is my opinion that I have provided enough capacity." If we accept the amendment to new clause 7 of my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) so that we cut out the words "in his opinion", it makes it more difficult for the court to interpret. There will not then be anybody's opinion, so the court will simply have to interpret whether adequate capacity or services are provided in vacuo, and without any guidance.

Mr. Robert Hughes: Why does the Secretary of State take such objection to the words "in his opinion" when the Bill is littered with his own phrase "as he thinks fit"?

Mr. Ridley: The hon. Gentleman may or may not be a lawyer; I do not know. He must realise that if I am in a court of law, all I have to do is say, "In my opinion, I did not steal the hon. Gentleman's wallet," if the charge is that I have stolen the hon. Gentleman's wallet and it is accepted that it is a matter of opinion whether the wallet was stolen. It is a very easy defence to say, "In my opinion, I did not steal the wallet." That is why those words are important.
My hon. Friend the Member for South Hams was concerned not so much about the failure to provide sufficient capacity as about the extreme case of an airport operator who decided to convert the airport to other uses such as housing. The answer was in his own speech. A change of use would require planning permission and it is not enough to suggest that the planning authority could simply grant it, as happened in the case mentioned by my hon. Friend the Member for Christchurch (Mr. Adley). If it was proposed to convert an airport to housing or any other non-airport purpose, my right hon. Friend the

Secretary of State for the Environment might wish to call in the planning application and consider it in relation to airline policy.
I am not saying that he would do so in all cases, because some airports are tiny and not used at all, or very little. Clearly in such cases it would be right for those airports to be put to other uses. However, in the case of any sizeable or major airport I have no doubt that that would be the defence that would ultimately be open to the Government. If an airline operator were to buy houses surrounding an airport and claim that the houses would increase in value if the noise was stopped, that would be a strange plea for planning permission and could certainly be the subject of a call-in in the way that I have described.
My hon. Friend the Member for Brentwood and Ongar returned to the point about the need for consultation. I think that the Bill is littered with instances where airport operators have to consult and I think that he will find one or two more in the amendments before us tonight. It is difficult to think of other places in the Bill where requirements to consult could be placed. I think that the debate on the scheduling committees illustrated the extent to which the airlines, even if they are not consulted, make their views absolutely clear and well known to the airport operators. Therefore, I hope that my hon. Friend will not feel that we have neglected that.
My hon. Friend the Member for Tayside, North (Mr. Walker) tabled new clause 9. The belief which expressed itself in the debate on new clause 7 came through in new clause 9—that it is possible that the BAA will not provide adequate capacity at some stage in some airport. New clause 9 seeks to allow airlines or others to provide extra terminal capacity, subject to them obtaining planning permission.
I promised to look at that again because I believe in competition as much as my hon. Friends have been kind enough to acknowledge. I wanted to ensure that we missed nothing. I said in Committee that I thought there was a one in a thousand million chance that it might be possible that an airport would be short of capacity, would refuse to build more and would seek to deny an airline or another developer the opportunity to provide that extra capacity. However, I do not believe that such an example of an airport deliberately starving itself of capacity is likely to occur. There are some reasons in the Bill for thinking that. I shall give one or two reasons why I do not believe that what is proposed would be the right solution, even if that were the case.
In clause 36 (2) there is a duty on the Civil Aviation Authority, while conducting its economic regulation, to encourage investment and make sure that the financing of investment is allowed for in price regulation. Secondly, it is very much in any airport operator's interest to seek to maximise traffic. If we are to get the profit motive into airports through the Bill at all, the way in which extra profits will be made, particularly with economic regulation, is partly through reduction of costs, but mainly through increase of throughput.
Every passenger who is contented, has enough space in the terminal, is not jostled, does not have to queue, and can sit down, will be likely to spend a little more in the shops. That is the way in which extra revenue will come to the airport operator. Therefore, deliberately to cramp, deny or restrict the space provided is deliberately to restrict


one's own profits. For those reasons, it is almost unthinkable that anybody would deliberately produce less capacity than was humanly possible.
I must give my hon. Friend the Member for Tayside, North the reason why I wonder whether it is a proper solution to give powers to other airlines or consortia to build extra terminals in defiance of an airport operator's wish. I think that the whole House will agree with me that if an airline or another operator agreed with the airport operator that extra terminal capacity would be provided, not by the airport operator but by somebody else, that would be ideal. That is what has happened in New York, as my hon. Friend knows. As a policy, the port authority there has agreed with other airlines that they should build their own terminal capacity. That is excellent. I hope that it happens here. However, there is not so much space here for every airline to have its own terminal as there is in airports abroad.
For example, if—it is a big "if"—British Airways were to build terminal 5 at Heathrow, after the problem of the sludge works had been conquered, and it provided terminal capacity for 15 million passengers per annum, presumably it would move out of terminal 4, leaving it virtually empty, with just the Dutch airlines and Air Malta there. Even if other airlines moved into terminal 4, they would leave a gap wherever they moved from. Therefore, there would be an inefficient and uneconomic use of the scarce facilities at Heathrow, where there is a limitation on space. Half the space would be taken up by terminals that were not full.
I owe British Airways an apology about the cargo sheds. There are 17 cargo sheds. which were not, as I said in Committee, all taken by British Airways; they were taken by airlines of all sorts. The point remains valid, however, that when British Caledonian wished to have a cargo shed at Heathrow, although there was plenty of spare capacity in those 17 cargo sheds, not one airline was prepared to make the necessary arrangement to accommodate British Caledonian, so another cargo shed had to be built. That is an illustration, on the cargo side, of the same point that I was making about terminals.

Mr. Wilkinson: Will not my right hon. Friend reconsider his somewhat unnecessarily negative statement about terminal 5 and the Perry Oaks site? Is not the important aspect of the matter the fact that there should be no inhibition on the potential development by the airport operator of such a valuable site for terminal facilities that might be desired by the airlines? For commercial reasons, the airport operator could have other intentions for the site, such as a waterfowl park. Is not what my right hon. Friend said much too negative? The development of a fifth terminal at Heathrow could not become a commercial proposition until there was sufficient demand by the air transport operators, who would be able to move in and fully occupy those facilities.

Mr. Ridley: I have the greatest respect for my hon. Friend, but for once he is not right. If British Airways moved into a new terminal 5 and filled it, it would leave an enormous vacuum in the other terminals. The airport operator would have to forgo the rent for them, so that it would lose a lot of money, or other airlines would have to be surcharged to cover the cost of the empty space at the other terminals. That would not be at all fair on the other airlines.
It is worse than that. Supposing that the constraint on capacity at Heathrow is the runways—as I have always said—not terminal capacity, and supposing suddenly capacity for an extra 15 million passengers was provided at terminal 5, British Airways would say: "I shall put more flights through my terminal 5 Will you please chuck some of these people out of the lifeboat because I have a terminal. I do not care about the others. I shall monopolise the runway capacity." Out of the lifeboat would go all my hon. Friends who support the small airlines, which I too support. Therefore, there is a real risk. I hope that no one will take offence, least of all British Airways, because I have used it as an example to illustrate my point. I am sure that BA would not behave like that.
The policy of allowing extra terminal capacity at the will of an airline could severely disadvantage other airlines. As we are seeking to make airports open for all, without discrimination or favour, I believe that there are some fairly strong reasons why it would be better not to do that.

Mr. Bill Walker: My right hon. Friend is touching on a fundamental and important point. Let us consider the very fact that the site at Perry Oaks exists and that there will be a need to redevelop the central area of Heathrow. At some time there will be inadequate terminal capacity because of the need to redevelop the central area. That is what we have in mind. My right hon. Friend has grasped many of the nettles. The problem has been that Governments have refused to face up to the problems of looking ahead, in aviation policy. I believe that the development of our prime airport is one of those things. That is why it is necessary for there to be at least an opportunity for private capital to help the development.

Mr. Ridley: My hon. Friend is absolutely right. It would be useful if an opportunity could be found to redevelop the central area of Heathrow.
Extra terminal capacity might be required while it was being done. It is within the capability of the BAA successor company, in conjunction with the airlines, and with private capital, to do that by agreement, but my hon. Friend is seeking to give the airlines a right to do it in the absence of agreement with the airport operator. That would lead to the evils that I have just described. I would encourage and welcome co-operation between all concerned in providing the capacity that is thought to be necessary, but there should not be conflict leading to discrimination or favour.

Mr. Dicks: The weight of my right hon. Friend's argument would be increased if most Conservative Members were not aware of the fact that the BAA is determined to see Stansted advanced, at whatever cost. Therefore, there would not be fairness and compromise over the decision on the development of terminal 5 at Perry Oaks. There would be a feeling among the airlines and many people that the BAA is biased, as perhaps my right hon. Friend is, with respect, in favour of Stansted. Does not my right hon. Friend agree that the role of the airport operator is to give the airlines the facilities at an airport so that they can provide a service for their customers?

Mr. Ridley: I agree entirely with my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) on his second point, but I found his first point confusing. My hon. Friends have expressed concern that insufficient


capacity will be provided and that something should be written into the Bill to force airport operators to provide as much capacity as is necessary. When the airport operators have tried to do so at Stansted the same hon. Friends have been extremely alarmed. My hon. Friends cannot have it both ways. They would like to decide where and when capacity is reached, but the British Airports Authority has been trying to provide the extra capacity that is needed. Yet my hon. Friends have sought to criticise the authority for not doing that.

Mr. Jessel: My right hon. Friend said that the main limiting factor at Heathrow is the limitation capacity on runways. I would also ask him to consider that the highway capacity on the approach roads could become increasingly relevant. Despite the tremendous benefits conferred around London by the M25, that motorway already shows signs of being highly congested at peak hours. The A4 out of central London is also congested. Therefore one cannot go on for ever expanding capacity at Heathrow.

Mr. Ridley: I congratulate my hon. Friend on getting in a well deserved plug for extra infrastructure at Heathrow during a Bill which deals with aeroplanes rather than other forms of transport. My hon. Friend will be aware that we are deep into a study on how to improve access to Heathrow, though the report is not yet ready.
I do not consider that these amendments are necessary, although I have much sympathy with both the new clauses. When one comes to try to devise a statute, which we are now making, which holds up to the type of examination that the House would like to expose it to, I think one would find the amendments would be difficult to incorporate in a way that would improve the Bill. I think we have got it right and I hope my hon. Friends will not feel that they wish to press the new clauses.

Mr. Steen: With the leave of the House.
I am always moved when I hear the Secretary of State, because he is extremely persuasive and he puts his case very nicely. I feel sure that new clause 7 will not go well in the Bill if my right hon. Friend says that it will not do so. We have disagreed only on where the Okehampton bypass should go. My right hon. Friend wanted it to go south, and I wanted it to go north. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Mr. Deputy Speaker (Sir Paul Dean): Does the hon. Member for Tayside, North (Mr. Walker) wish to have a Division on new clause 9?

Mr. Bill Walker: With the leave of the House, I wish to—

Mr. Deputy Speaker: Order. The hon. Gentleman has had his say. If he wants a Division, he should move the new clause formally. If not, there is nothing more to be said.

Clause 1

POWER TO DIRECT REORGANISATION OF BAA's UNDERTAKING PRIOR TO APPOINTED DAY

Mr. Alfred Morris: I beg to move amendment No. 1, in page 1, line 14, at end insert—
'Provided that such proposals shall make provision for Stansted Airport to be operated as an independent free-standing company.'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 2, in page 2, line 17, at end insert—
'Provided that the Secretary of State shall not approve proposals in relation to Stansted Airport unless they provide for its operation as an independent free-standing company.'.
No. 3, in line 17, at end insert—
'(3A) The Secretary of State shall not approve proposals under subsection (3) if any company so nominated owns more than one airport serving the same area as defined by section 28(6) except that, for the purposes of this section, airports operating in Scotland shall not be regarded as serving the same area.'.

Mr. Morris: With very many others, I am most grateful to Mr. Speaker for selecting these important amendments. They have been signed by scores of hon. and right hon. Members from all parties and from every part of Great Britain over and above those whose names have appeared on the Amendment Paper today.
For several years Members from both sides of the House have fought long and hard to impress upon the Government the importance of Britain's airports outside the south-east. We did so not simply because of the stimulus that they bring to ailing regional economies in the regions devastated by unemployment, but also in the national interest, because of the way in which they can, given the growth of which they are capable, relieve pressure on the overburdened London airports.
Our demands were simple. We urged rejection of a massive expansion of Stansted airport. The decision to develop that airport to 15 million passengers per annum rising to 25 million passengers per annum was neither necessary nor desirable. We also urged the development of a coherent airport policy which would enable the regional airports to compete on equal terms with the London airports. Here I must emphasise that this did not, as some argued, involve the forced diversion of passengers.
What it required was a positive effort, first, to liberalise the network and make it easier for airlines to be allowed to operate direct to and from regions outside the southeast, and, secondly, to eliminate subsidy to Stansted. These demands were demonstrably reasonable. The Government endorsed them and, indeed, much to the credit of the all-party North of England Regional Consortium, they now form major tenets of Government policy, as explained in the 1985 White Paper.
The elimination of subsidy to Stansted is vital to airports outside the south-east. They have to operate as free-standing entities. Their charges have to reflect the cost of operating and developing their facilities. Stansted, on the other hand, is not subject to such disciplines. Charges at Stansted have been consistently low for some time, and are at their comparatively low level solely to attract traffic. In fact, charges at Stansted are, on average, four times lower than those employed at major airports like Manchester, Birmingham and Luton.
The Secretary of State suggested last year that he understood our concern. He promised that arrangements would be made to eliminate subsidy, so that if Stansted was to grow, the market alone would determine the pace of its development and not the motivations of the BAA to maximise the size of its asset base. These promises were generally welcomed by regional interests. Conservative Members from northern constituencies expressed their delight. Others were more cautious. They argued that promises were fine, but felt that action would be the test of the Government's sincerity. How wise they were.
The Government now seek to argue that subsidy to Stansted will, in the Secretary of State's own words, be "cut out", by ensuring that any transfer of funds between the holding company and its subsidiaries will take place only at the commercial rates of interest. This view is misconceived. Interest rates differ according to the risks involved. When capital is raised on the market by the holding company specifically for Stansted, the risks will not be attributable to Stansted, but will reflect the profitability of Heathrow. Therefore, the rate of interest will be lower than what it would otherwise be, and this will represent a hidden subsidy to Stansted—incapable of accurate definition. At the same time, there will be nothing to prevent the Stansted subsidiary not repaying the loan.
I fully understand that the Secretary of State will argue that the policing powers of the CAA will then come into play to combat predatory pricing behaviour. The central question here, however, is about the effectiveness of those powers and, more particularly, the extent to which it will be possible for all funding arrangements within the BAA group to be identified.
The North of England Regional Consortium asked independent accountants to examine part IV and to advise on whether the provisions were sufficient to achieve the objectives both of full transparency and resistance to predatory behaviour. I have to advise the Secretary of State that the Bill failed the test. His amendment, to be debated later, to clause 38 will improve the Bill, but it will still be riddled with deficiencies. The Government have shown no desire to correct them and tried to get by in Committee with assurances to the effect that we should not worry because the point is covered somewhere else or that everything will be all right on the night. That will no longer do. We are now at the Report stage and such empty assurances just will not wash.
9 pm
Let me make it clear that full transparency will not be achieved unless the following minimum changes are made to the Bill. The first is that there must be a specific and mandatory requirement for the holding company to produce detailed accounts for each of its subsidiary companies. The BAA can discharge its Companies Act obligations simply by producing group accounts. As the Bill is presently drafted, the CAA will have only a discretionary duty to seek detailed accounts. Unless separate accounts are produced, it will not be possible to identify contracts and accounting practices within the group, or to prevent a misuse of assets and resources. Subsidy to Stansted, as the Secretary of State knows only too well, will take place in forms other than inter-company loans.
The second minimum change required is the need to give the CAA a full picture of income and expenditure under all headings, yet clause 37(2) provides for only the

production of "aggregate" information. There are many types of ancillary services subsidised at Stansted which would be concealed by such information. Examples are air traffic control, where Stansted records a loss of over £1 million, and central charges, where there are many staff based centrally serving all three London airports. Unless full details are available, it is simply not possible to ascertain a true picture.
The third and final minimum change required affects the power given to the CAA to insist upon minimum charges at the London airports. This does not go far enough. The CAA should be concerned to ensure not only that charges are reasonable, but that they are cost based. This, of course, has particular relevance to Stansted.
Our major concern with part IV, however, and indeed with the total arrangements for restructuring the London airports, is that subsidy will be perpetuated as clearly as night follows day. It will be for the CAA to try to ensure that it is kept to reasonable levels. This will be no easy task. Indeed, much of the damage will have been done before the CAA can act. The development of Stansted, which has now been approved for investment purposes, will be under way shortly and will be massively subsidised. despite the fact that the Government in their White Paper promised that charges would rise steeply in order to meet the cost of increasing capacity. In the peak period, the cost-based charge for a Boeing 747 should be £5,533. It is presently £1,422. That is a difference of £4,111, and a huge 75 per cent. reduction.

Mr. Adley: To confirm what the right hon. Gentleman says, is he aware that a major tour operator has told me that, if the charges remain as they are, once the motorway system is completed it will be able to tell the average family going to Majorca, presently flying from Manchester airport, that it can save them at least £15 per head on their package tour by putting them in a bus and taking them to Stansted? That will be at least £60 for a family of four. That is the sort of thing that will happen unless the right hon. Gentleman's points are met.

Mr. Morris: I much appreciate the hon. Gentleman's intervention. He will appreciate that I am trying to put the case in hard summary, since many other right hon. and hon. Members wish to speak.
Our concern in the House must increase when account is taken of the North of England Regional Consortium's most recent publication "Stansted and the Airports Bill", which I warmly commend to the House. It is a document which shows that there is no inherent reason why Stansted cannot operate on a free-standing basis. Indeed, there seems to be considerable scope for that airport to meet its own development costs. That must be so if traffic demand for Stansted grows at a pace which the Government believe to be reasonable.
The Government cannot have it both ways. They cannot argue that market forces will ensure that demand for Stansted will be so high as to make a development necessary, and at the same time argue that subsidy is required to ensure that demand is accommodated at the airport. The North of England Regional Consortium believes that a rate of return of at least 5 per cent. could be generated by a £200 million investment in the airport. Some will argue that that figure is too low, but I would ask the Government to show me what assumptions have been employed that can demonstrate that the approved strategy


is economic. I admit that there may well have to be savings if Stansted is to be free standing. Sir Norman Payne's objective of building the most substantial and lavishly equipped airport possible may have to be modified in the face of the commercial disciplines of the market place.
The amendments are crucial to a balanced national airports policy. That is the core of our concern. The aviation system is already over-regulated. Market forces are already distorted. Subsidy would only intensify those anomalies to the detriment of regions outside the southeast, and it is all the more unacceptable when it is not economically or socially justified.
I hope that the Secretary of State will now find himself able to accept the amendment. We could then agree across the Floor of the House a detailed definition of a freestanding airport. As I see it, such a definition would at the very least limit investment funds for Stansted to those coming from retained earnings or borrowings direct from the capital market. Loans from the holding company for the Stansted subsidiary would not be allowed. Does the right hon. Gentleman accept that definition?
In January of last year right hon. and hon. Members from all parts of the House rejected the Eyre report and its proposals massively to expand and subsidise Stansted. We did so for a variety of reasons, not the least being the way in which such a proposal would prejudice the north of England, and indeed all the airports outside the south-east. The vote on the amendments under discussion is just as important. I urge hon. Members on both sides of the House to join forces in the Lobby in support of the amendments.

Mr. Fred Silvester: I support the amendment moved by the right hon. Member for Manchester, Wythenshawe (Mr. Morris), with which is grouped amendment No. 3. Amendment No. 1 would take Stansted out of the BAA's clutches; amendment No. 3 would remove Gatwick as well.
I am not perhaps the driest member of the Conservative party, in traditional terms, and it is perhaps curious that I should be making an appeal to a Secretary of State whose political reputation has been built on private enterprise and competition. My right hon. Friend was the scourge of monopoly in film distribution and, more recently, the lion of the buses. We need to know why, in the face of Norman Payne, he has become a lamb.
The situation is very odd. It is odder still because, according to the authority of my hon. Friend the Member for Worcestershire, South (Mr. Spicer), the original belief was that the best approach was to privatise the airports separately. In Committee, my hon. Friend said:
my right hon. Friend the Secretary of State and I have an initial prejudice towards the separate privatisation of the British airport companies".—[Official Report, Standing Committee J, 20 February 1986, c. 200.]
That is odd, too. The Secretary of State, who is by temperament in favour of separate companies, and the Minister originally believed that that was the best way to proceed.
A third curiosity to be added to the list is the undertaking given by the Minister many times that there will be no subsidies or special concessions given to Stansted which are bolstered by the operations at Heathrow and elsewhere. In Committee, my hon. Friend said:

It is totally accepted by the Government that none of the three London airports should be able to develop or trade unfairly against other United Kingdom airports."—[Official Report, Standing Committee J, 20 February 1986; c. 204.]
What is odd is that the most direct and simple way of achieving that would be to stick with the original proposition to treat Stansted as a separate airport. We would not then have to jump through so many hoops; it would have happened automatically.
Faced with those oddities, I looked carefully at my hon. Friend's speech to find an explanation. He gave various reasons why it was essential that the three airports should be privatised together. First, he said that there was no competition between the three airports in price, access or service. That is also an oddity. We, who believe in the drive towards free enterprise companies, are suggesting that, even within the constraints of civil aviation, there will be no difference between the management of differently owned companies, that somehow one company will not press for better access and that another will not offer different services.
Even that is not the key point. My hon. Friend was referring to competition between the three London airports. He forgets that there is wider competition—with Luton, Southend, Bristol. Manchester and other regional airports. My hon. Friend the Member for Christchurch (Mr. Adley) gave an example of how that would operate. It is not simply a carving up of those three airports; it would have a ricochet effect throughout Britain's airports.

Mr. Michael Spicer: Is not the greatest competition with Schiphol?

Mr. Silvester: That was my hon. Friend's second point in Committee. I am dealing with his points in order. He said that we must ensure that the 11 per cent. of passengers who interlink at Heathrow to continue their journey to other countries do not buzz off to Schiphol or Frankfurt. I do not want to go over the whole matter again. My hon. Friend has had many opportunities to explain what he means, but he has singularly failed to do so. The competition is between Heathrow and Schiphol, Heathrow and Frankfurt or Heathrow and somewhere else. It is not between Stansted and Schiphol or Gatwick and Schiphol. He has not explained why providing additional capacity at Stansted will save for the United Kingdom the traffic that is changing planes at Heathrow, which is the only place where passengers want to change planes.
My hon. Friend's third argument—he underlined it with some crossness—was that we should find ourselves in trouble with the small airlines and regional airports that would be gradually excluded because Heathrow was becoming too full and they would be the first to be booted out. Even if that were true, my hon. Friend is driving a coach and horses through the Bill. He is setting up a huge regulatory apparatus. He knows as well as I do that one of the primary considerations that the CAA would have to bear in mind is the proper servicing of the London system from the regional airports. The CAA is governed by regulations.
In Committee my hon. Friend said that regulations would have to be extended and would be more difficult. He did not elaborate on that. No evidence has been produced to show that that would be necessary. The regulations exist. I have been unable to determine why the smaller airports and the small airlines should be excluded under one system any more than under another.
We come at the end to the truth. The Minister makes no bones about it. It is all set out for us to read. He said:
If the London airports were to be privatised separately, the development of Stansted might be delayed until a time beyond which the capacity was required … My hon. Friend—
that is, my hon. Friend the Member for Saffron Walden (Mr. Haselhurst)—
accepted that a separate developer at Stansted might wish to pace his development leaving aside the question of how long it would take to sell the airport to a separate developer and from then on proceed with development. It is our view that development of Stansted must begin almost immediately."—[Official Report, Standing Committee J, 20 February 1986; c. 203–4.]
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That is the core of the argument. The core of the objection is fear of delay—delay in selling off the airport, delay between the sale of Stansted and the beginning of development, and delay because, in my hon. Friend's curious phrase, a separate developer might want to pace himself.

Mr. Haselhurst: Is my hon. Friend aware that, so eager is the British Airports Authority that there should be no delay, it has already issued official invitations to a ceremony next Tuesday to mark the start of the work?

Mr. Silvester: The BAA has never been known for its modesty. Its assumption that it will get its way here is part of history, is it not?
Let us consider the objections. As regards delay in selling off the airport, some Members—there were some in Committee—question the viability of Stansted as a saleable asset in its own right. I doubt whether that argument can be sustained for long. The right hon. Member for Wythenshawe has already drawn attention to the analysis by Peat Marwick, which shows quite clearly that it is a viable proposition. The question of what price is paid for any proposition is for the market to determine. Members on the Government Benches believe that, given an opportunity, the private enterprise system will provide the means for such an organisation to develop and to flourish, provided that there are no public restraints upon it.
My right hon. Friend the Secretary of State has removed the main public restraints. He has got the planning permission that has dogged private enterprise. British Rail can hardly wait to start work on its railway line. The Government, as I understand it, have either approved or are prepared to approve the necessary infrastructure. The forward estimates for the market have been well underlined by the Secretary of State, aiming at £8 million. It is not a tenable argument to suggest that, given all that, Stansted is not a commercial proposition for a potential purchaser, particularly as it is in the south-east. Many companies, such as Manchester airport, have been making profits for many years. Stansted could easily do so, too. Nor do I think that the amount of money that we would get for Heathrow be much affected. I cannot believe that hiving off Stansted will stop someone buying Heathrow, with or without Gatwick.

Mr. Wilkinson: Is not a further significant argument the fact that the subsidising of Stansted by a privatised BAA could inhibit further development at Heathrow and the exploitation of that airport's full potential? We should bear that in mind.

Mr. Silvester: It is true that, in so far as the accounts become transparent, any subsidy to Stansted would be a charge against the profits of Heathrow, and that would have to be borne in mind by the shareholders.
The second point that my hon. Friend made was the delay between the sale of Stansted and the beginning of development. A lot of work has already been done, as my hon. Friend the Member for Saffron Walden well knows. There is no lack of enthusiasm or assistance in the Department of Transport to help this along. I have no doubt that if we were prepared to speed the thing along, we could get it moved in a way that everyone would find satisfactory. In passing, the disaster of British Airways may provide a window for the earlier launch of the British Airports Authority.
The last point that my hon. Friend made was that a separate developer might want to pace himself. That is where we should focus our attention. That is the nub; that is what it is all about. Pacing himself means responding to the market and not providing over-capacity, but Fully utilising the assets. It means considering the various alternatives. In this case, the capital market exercises a discipline. I give my right hon. Friend full credit for having sought to provide non-subsidisation within the limits that he has set himself. He has done that in good faith, but from an impossible starting point. I have met nobody who can show me how, given a group company structure, it is possible to prevent Norman Payne and his boys from controlling Stansted in the manner which they wish.
The difficulties of finding a commercial rate of interest on capital have been outlined. The ease of raising capital will be substantially affected. On this basis of expenditure, Stansted will lose money for many years and will be a loss-making airport attracting business from other airports. The only way that my right hon. Friend will be able to meet his obligation is by imposing an extraordinary level of regulation. The Bill is full of regulations to which we are adding tonight.
If we approach the matter more directly and simply say that all the airports should be dealt with separately, we will meet the problem immediately and in full. It mystifies me why my right hon. Friend has not done that. He may be worried that, when we get down to the nitty gritty, Stansted will not be big enough soon enough, but he is putting before us a dubious proposition which at best will mean a short-term gain. In return we will have a long-term problem in dealing with a growing and powerful monopoly which will sit upon British civil aviation for many generations.

Mr. Lewis Carter-Jones: I am delighted that the Secretary of State has returned to the Chamber. I cannot understand why he does not save the time of the House by accepting amendment No. 1. I shall read it out so that the House may agree that it accords totally with the political philosophy of the Secretary of State:
Provided that such proposals shall make provision for Stansted Airport to be operated as an independent free-standing company.
That is what the Secretary of State has been advocating year after year. Why does he not save time by interrupting me now to say, "Of course we accept it," so that we can get on to other issues of greater import?
The fact is that Payne's panzers have got at him. Payne has made a pre-emptive strike. The hon. Member for Saffron Walden (Mr. Haselhurst) said that, despite the fact


that we have not yet completed consideration of the legislation, all the plans are laid and everything is ready. It is a classic pre-emptive strike in the true panzer sense. We are allegedly discussing a development which, in effect, is already taking place. The Secretary of State should in honesty accept the amendment or tell us clearly that he is Payne's man. What we have is the voice of the Secretary of State but the hand of the chairman of the British Airports Authority.
I would not have accepted a clause of this type if it had applied to Manchester airport. If support is to be given, it should be given to those parts of the country which are in the greatest need. In Manchester we have a superb airport, capable of reinvigorating a depressed region. If the Secretary of State has changed his mind and is prepared to accept subsidies, why is he prepared to allow Stansted to be subsidised but not Manchester, where the greatest need lies?

Mr. Haselhurst: I am well aware that the House has been tolerant with me on a number of occasions when I have spoken about airports and Stansted. I think I am able to say that this is positively the last occasion on which, in a major debate, I shall be heard pontificating on this subject.
This debate is not a rehash of the question of the third London airport. When all other arguments failed, the BAA believed, and I think persuaded my hon. Friend to some extent, that this was really an attempt to undo the decision on Stansted. I say again that that is certainly not the intention behind these amendments.
It could be said that Stansted, as a free-standing airport, might be rather more of a success, to the chagrin of at least some of my constituents. I am looking at this matter on the basis of what is right for civil aviation. I also support the amendments on the basis of the political philosophy that, on the whole, more competition is better than less competition.
The case for separate ownership and the maximisation of competition ought to be self-evident, at least to my right hon. and hon. Friends. My right hon. Friend the Secretary of State has confessed his attraction to it on a number of occasions. Indeed, one feels that my right hon. Friend is philosophically drenched in the doctrine of more competition and more adherence to market forces. Yet somehow he has allowed himself to be overborne and all his instincts to be suppressed by the argument, one suspects, of the British Airports Authority that it should maintain a monopoly in the London airports system.
The arguments that have apparently persuaded my right hon. Friend have been referred to already by my hon. Friend the Member for Manchester, Withington (Mr. Silvester). There is the argument that the three airports cannot really compete. That is a contestable proposition. It is true that there is not scope for competition over 100 per cent. of the activities, but there is still some scope for competition between the airports.
However, the real point, and the one that I do not believe my right hon. Friend has properly addressed, is that there would be a quite different approach to the running of the airports by an operator who had all three of them as compared with operators who had one each. The whole attitude would be bound to be different. The owner of all three would not be under any great pressure to

maximise the improvement of services at Heathrow and Gatwick when he had plenty of spare capacity at his disposal at a third airport in the system.
Anyone can run airports in that situation; it is the easiest thing in the world. Any half dozen of us could take charge of an airports authority which was in that happy situation because it would be almost impossible to fail to make money. But if there is competition, one airport against another, it becomes a harder and tighter game. That is what it should be, and that is what Conservatives, on the whole, tend to believe is the right way of running almost any organisation. We are prepared to introduce competition into the supply of water, gas and so on, where it might be argued that there is quite limited scope for competition, because we believe that it is right to do so. Therefore, why we cannot do it with airports simply baffles me.
There is the international competition argument, that London needs to be a system in order to compete with Amsterdam. My hon. Friend the Member for Withington has referred to that. It is most misleading to argue that, in order to expand facilities in London, Stansted, in particular, is necessary so that London can retain its competitive position. London can be competitive only through the maximisation of facilities at Heathrow. That is the test. If an international business man travelling to Europe has to interline and can do so on the one route at Amsterdam, he will do that. He will look twice at anything that is not as good as that. Therefore, we must maximise the facilities at Heathrow. The idea that people should come on a bus from Stansted round the M25 in order to satisfy London's competitive position is both laughable and ludicrous. It is astonishing that my right hon. Friend the Secretary of State should use that as a serious argument.
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I now come to the hearts and flowers bit. It is said that if we do not go along with this monopoly, the small airlines—those dearest to our hearts—will be squeezed out. But I do not see why the operator at Heathrow should want to squeeze out small airlines which are a valuable source of his interlining business. Moreover, the charges for large and small aircraft can be, and are being, regulated in order to close the gap between them. But even if the operator at Heathrow wanted to behave like that, my right hon. Friend the Secretary of State would have the power to ensure that no such unfair or discriminatory policy was allowed.
The back-up to that argument is that it would be extremely complicated for my right hon. Friend the Secretary of State to use the powers in the Bill and that it would be difficult to write the prospectus. But there is no point in having powers if they are so complex that they cannot be used. Furthermore, in taking those powers, my right hon. Friend must have some idea of how he might use them.
In, I believe, its policy document CAP 517, the CAA has put forward a proposal for distributing the traffic round London's airports. It is not necessarily the last word on the subject, but it represents a sensible and coherent approach. My right hon. Friend the Secretary of State might favour another approach, but the CAA has shown that it is possible to produce a document explaining how the traffic could be distributed. Therefore, it is not impossible to get


over the legal obstacles. The Secretary of State cannot say that he wants the powers but would not know how to use them.
There is then the argument over the delay in development. Whether someone believes that there is a risk of delay in development depends on whether he believes in the forecasts. The present forecast is that the London airports system will be saturated by 1991 unless extra capacity is provided, but if that is proved right it will be the first forecast to come true. I understand that Stansted is losing business on a year-on-year basis. For the sake of British avaiation, I hope that there will be a steady improvement in our position. However, it is unlikely that the forecast for 1991 will prove any more accurate than its predecessors.

Mr. Adley: Is not my hon. Friend perhaps a little too polite? He really means what many of us feel, which is that, regardless of transport and regional policy interests, the Government are trying to boost the notional value of Stansted as part of the privatisation of the BAA in order to achieve a quick return on capital regardless of the longterm effects on the country.

Mr. Haselhurst: My hon. Friend may be right about the intention, but it would be an extraordinary intention. It presupposes that people are incapable of reading a prospectus and do not understand what is happening about airports. They must know perfectly well the demand for the airports; and they must know the present profitable sectors in the London airport system. Stansted cannot be hidden if it is a loss maker. Its potential is the same under any ownership; it has a certain potential or no potential. It cannot be hidden in a basket of airports and flogged off to an unsuspecting customer.

Mr. Wilkinson: Does my hon. Friend agree that, if the privatised BAA operated entirely commercially, perhaps the most sensible thing it could do would be to sell Stansted as soon as it got it?

Mr. Haselhurst: That is possible but unlikely. The record of BAA shows that it has believed in building up its empire. I cannot believe that on the morrow of privatisation it will change its habits quite that quickly; in time it may do so, but not immediately. As my hon. Friend the Member of Withington pointed out, would anybody buy Stansted if it were offered separately? It is a commercial risk, but it is hardly for my right hon. Friend, on behalf of the Government, to try to argue that point, because he and the Government have convinced themselves that demand will be such that Stansted is vital to the capacity of the London system. If they believe that and know there will be this demand, and if we accept the forecast that Stansted will operate for 7 million to 8 million passengers per annum by 1995, it does not lie with them to argue that no one will buy an airport with that potential.

Mr. Dicks: Is it not shameful for the Government to support the BAA investment plans for Stansted by an input of many millions of pounds, when we have yet to get the Bill through the House?

Mr. Haselhurst: The BAA is ever hasty. It surprises me that the ceremonies should be going ahead so quickly. If the Government are right about the traffic forecast, Heathrow's ultimate capacity is 38 million to 40 million passengers per annum, and Gatwick may take as many as 25 million. However, thereafter any excess that wishes to

go to London will have to go to the only other airport where capacity has been provided. It is the decision of the Government, endorsed by the House, that that capacity will be provided at Stansted. On that basis, people in private industry will be interested in taking the opportunity to exploit that potential and to make Stansted a successful airport.
The recurring point throughout our debates on this subject has been the question of cost subsidy, which was dealt with in some detail by the right hon. Member for Manchester, Wythenshawe (Mr. Morris). My hon. Friend the Under-Secretary has said that the Government are determined that there shall not be unfair trading between airports. Great efforts have been made—I am thankful for this—to put tighter clauses in the Bill to ensure full transparency. Transparency is one thing; effective prohibition of the practices is quite another. It may be perfectly all right to see something going on; the question is whether anything can be done about it in time. There will be a possibly destructive competitive effect on other airports in the meantime.
There is one sure way of dealing with the question of unfair trading without any ifs or buts and that is simply to have separate ownership of the airports in question; then unfair trading cannot happen. My right hon. Friend should trust his instincts and recognise that there is more than one way of effectively running an airport. We should not cut ourselves off from the possibility of an alternative method of management in the London system. This is an opportunity to create a regime which maximises competition instead of snuffing it out. We should not forgo it.

Mr. Litherland: To make blood curdle in the northwest of England one has only to mention subsidy to Stansted. There is a deep anxiety, especially in the north of England that, if Stansted is developed, it will be at the expense of regional airports. Many colleagues could speak on behalf of their regional airports, but I am most concerned with Manchester international airport, which is now known as Manchester airport since becoming a public limited company on 1 April.
There is a deep and widespread anxiety about the proposals to construct new rail links to Stansted, highway schemes costing about £30 million and infrastructure such as housing surrounding such a development as the extension of Stansted. With the Channel tunnel in the offing, a bright future is forecast for the south of England, but at whose expense?
Emotions are aroused on this subject. Investment in the south-east is viewed with scepticism as it is seen to prejudice jobs and prosperity in the regions. I refer to regions where closures in manufacturing have been relentless. Nearly 750,000 jobs have been lost in the north since 1977. The experience has been heartbreaking and demoralising. People in the regions want hope and a future.
I realise that we do not extend airports just to provide jobs. There must be a demand for the airport and its services. There is such demand at Manchester, so the airport acts as a catalyst in the region. Any diminution of the airport's role would be disastrous for the area. We have had today a lobby by trade unionists and workers from various airports. They told us in no uncertain terms of their prospects if there is any subsidy to Stansted. They fear for their jobs and their families. It is not that I or any of my


colleagues oppose cross-subsidy. We made That clear in Committee. We oppose unfair and hidden subsidy that would create demand that is not true market demand. That is what will happen at Stansted.
It is feared that many regional airports are at a critical stage of redevelopment and that any massive subsidy to Stansted would create an imbalance. The Government have not reassured us that Stansted will not receive excessive subsidy. Emotions are aroused in the north because the issue is seen as another example of the great divide between the haves and the have-nots in the north and the south. The divide is getting wider. There is more deprivation in the area that I represent.
The North of England Regional Consortium can find no justification for supporting the continuation of any subsidy and argues most strongly that Stansted could stand on its own feet. We have heard from across the political spectrum that Stansted could and should stand alone. The consortium has led a campaign suggesting that Stansted should operate as a free-standing airport.
In that respect, there is great support from the Joint Airports Committee of Local Authorities and the Air Transport Users Committee. The need for Stansted to operate in that way relates to one objective—that of securing equal competition. We believe that, with subsidy to Stansted, there will be no equal competition. The throughput at Stansted, is about 500,000 passengers—well below the capacity of the existing terminal of 2 million passengers. Yet the terminal is to be expanded, initially to 7 to 8 million passengers, rising to 15 million passengers, at an initial capital cost of £200 million.
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Funding of that magnitude is incapable of being secured from surplus profits generated at Stansted. Therefore, we must conclude that the BAA approach is that cross-subsidy from profits generated at Heathrow airport must continue to support the operation of Stansted airport and to fund the development of Stansted's facilities.
The consortium accepts that there is a general case for subsidy in the transport sector. This acceptance is conditioned by two factors. The first is that it forms part of a coherent policy and the second is that it does not cause detrimental effects to the remainder of the system. The problem with subsidies to Stansted is that neither of those conditions is met.

Mr. Couchman: I shall detain the House only briefly. To judge from what my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) said, it is clear that this is his last stand on the issue for some time. This is, indeed, the last battle by those who are against—[HON. MEMBERS: "No."]—the development of Stansted. They have realised that fact, and they have tabled the three amendments that we are discussing.
It is equally obvious from what the hon. Member for Manchester, Central (Mr. Litherland) said, that he believes this to be a battle between north and south over where investment should be directed. He talked of cross-subsidy and unfair trading, yet he will not acknowledge that the retained income from Heathrow should be used to invest in new facilities at Stansted.
It is obvious that the British Airports Authority, as it is constituted, and the future plc, would wish to be retained as an unfragmented whole, to be able to attract money

from the market, to be able to retain greater income from the successful airports in the London hub to invest in Stansted, and to be able to create facilities which it believes to be necessary. I am persuaded of its arguments and from the beginning I have supported the development of Stansted.
My hon. Friend the Member for Manchester, Withington (Mr. Silvester) spoke of this being a case of Heathrow versus Schiphol, but if London is to maintain its pre-eminent position, it is more a case of the London hub versus Schiphol.

Mr. Silvester: I would genuinely like some information from my hon. Friend. No one has ever explained to me how expanding the capacity at Stansted will enable people wishing to interline at Heathrow to continue to do that rather than go to Schiphol. How will that happen?

Mr. Couchman: There will be some redistribution of traffic from Heathrow to Stansted. No one has suggested that that would not happen. That will create additional capacity at Heathrow, which will be necessary for the increasing interlining trade. I support Stansted and will vote against the amendments if they are put to the test.
As I have said, I do not wish to detain the House for very long. I understand that many hon. Members wish to contribute to the debate. I merely add that it is curious that the right hon. Member for Manchester, Wythenshawe (Mr. Morris), who asked for your judgment, Mr. Speaker, on whether the Bill was hybrid, should associate himself with amendments which make clear the degree of hybridity which those who are opposed to Stansted would wish to build into the Bill.

Mr. Robert N. Wareing: The hon. Member for Gillingham (Mr. Couchman) could not be further from the truth when he argues that the amendment is an attempt to prevent any progress being made with the development of Stansted airport. The hon. Member for Saffron Walden (Mr. Haselhurst) demonstrated that that is not the purpose of the amendment.
Some of us wonder whether the Secretary of State listens to the arguments of his hon. Friends, let alone of Opposition Members. The right hon. Gentleman is usually regarded as the high priest of free market economics, but he will not allow free market competition to stand in the way of the privatisation, as rapidly as possible, of all the London airports. That is the real reason for the Secretary of State having wandered away from his own theories. He has extolled the virtues of the free market economy so often in the House, yet he has succumbed to the pressures of the chairman of the BAA. It is unfortunate that he never succumbs to the democratic pressures of hon. Members in this place. He has decided to give way and to allow, albeit by artificial processes, the unfair subsidisation of the third London airport.
As my hon. Friend the Member for Manchester, Central (Mr. Litherland) has said, we are not against subsidy. Indeed, we often argue the need for subsidy as a vehicle for planning—in this case the planning of airport development. I am, however, against unfair subsidy. That is what is creating the divide between north and south in this instance.
We are often told that we cannot allow undue development of airports at the expense of the London airports and that Londoners must not be expected to go to


Manchester or to regional airports to start their journeys, but that is the usual process for so many who reside in northern Britain. London airports are being subsidised, yet Liverpool faces the prospect of administration by a joint board over the next three years, and rate capping. Incidentally, we do not regard Liverpool airport as being in competition with Manchester airport. We consider the airports to be complementary and believe that their development must proceed hand in glove.
If a public limited company is created, it will be subjected to all the costs that such companies face, including corporation tax, VAT and stamp duties. I advanced this argument in Committee, but never received a proper answer from the Minister. It seems that the assistance given to Liverpool airport will be on nothing like the scale that is now being offered to Stansted and the other London airports.
There have been developments at Liverpool airport in recent times as a result of co-operation between the then Merseyside county council and central Government. The demise of the county council will be a sad loss to many in that part of the country. As I have said, we face the prospect of a joint board structure. Investment in Liverpool airport has resulted in a new runway, airport terminal, apron and air control tower. Those developments have been funded by taxpayers' money. We are bound to ask ourselves whether taxpayers' money is being wasted. Liverpool, along with Manchester and other regional airports, will now be asked to compete at an unfair disadvantage with the London airports. That is totally wrong, and it is seen to be totally wrong by Conservative as well as by Labour Members.
I believe that airports such as Liverpool are facing a major disaster because the legislation will deprive them of any democratic structure and will pass them into the private sector at a time when they will be most disadvantaged. The Bill should be allowed to pass only if the amendment moved by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) is accepted.
In the north-west of England there is a strong feeling that the Government are biased towards the south. That feeling cuts right across party barriers.
In the area that I represent, 150,000 people are unemployed, of whom 54,000 are young people. We are seeing businesses disappear, but we are told by the Government that free enterprise zones and free ports are the way to the future. However, just, round the corner from the enterprise zone at Speke—not that I am a great supporter of enterprise zones—is Liverpool airport, now to be disadvantaged by the Bill.
I hope that Conservative Members will take into account not only this measure, but the burdens which are now being thrown on regional airports, such as Manchester and Liverpool, by other legislation, and that unfair competition is not what they were elected to pursue. I hope that they will join us in the Lobby on this group of amendments.

Mr. Adley: My hon. Friend the Member for Gillingham (Mr. Couchman) was not a Member some years ago. I think that it is now more than 13 years since, in the memory of some of my colleagues around me, the late Anthony Crosland, my right hon. Friend the Secretary of State for Transport and others of us took our decision on Maplin for many reasons, including the regional policy

reasons. If my hon. Friend the Member for Gillingham and the BAA think that this is the last they have heard of the Maplin story, to paraphrase another politician, they ain't heard nothin' yet.
I intervened in the speech of the right hon. Member for Manchester, Wythenshawe (Mr. Morris) to recount the brief story of a conversation with a tour operator operating package tours to Majorca and elsewhere using Manchester and other northern airports. The effect of the development of Stansted is deliberately to drag business to the south of England. The dragging of the business will be aided and abetted by the Government's policy over Stansted unless these amendments are accepted.
I have to say to my right hon. Friend the Secretary of State that I regard this as little less than a piece of financial jiggery-pokery to maximise the value of the British Airports Authority in its immediate pre-privatisation period. I do not believe that the Government are honouring the spirit of the agreement that was reached with the House over the way to deal with Stansted. I regard the insult to the regions as something up with which I am not prepared to put as a Conservative Member. There is no doubt that what we are doing will disadvantage the northern regional airports. I regard it as shameful, and I shall certainly vote for the amendment.

Mr. Frank Cook: I am fairly confident that the words that I have to offer will not be taken well by the Secretary of State, nor even by the Under-Secretary, because they have been paying scant attention for the past 30 minutes. However, I hope that the hon. Member for Gillingham (Mr. Couchman) will pay close attention, because either he is incapable of understanding the points at issue, or he chooses deliberately to misrepresent them.
The point is not that Stansted might receive subsidy but that other airports throughout the provinces, which are already functioning effectively, have achieved that status and efficiency by dint of effort over previous years—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the airport Bill may be proceeded with, though opposed, until any hour.—[Mr. Archie Hamilton.]

Bill, as amended (in the Standing Committee), again considered.

Question again proposed, That the amendment be made.

Mr. Cook: The provincial airport have achieved their efficiency and effectiveness without any subsidy, and by dint of hard work and effort. That would not be so if Stansted could be cross-subsidised by other airports within the BAA. We are told, reliably, that the counter to any possible cross-subsidy would be the business of transparency. Presumably one would be able to identify the event if it took place.
I say to the Secretary of State, as he now appears to have perked up a little and may be paying closer attention, that in the days when Black Bess was the animated flying machine traveling between York and London it was small consolation to the passengers in the stage coach that the name of the robber was Dick Turpin.

Mr. Wilkinson: My hon. Friend the Member for Manchester, Withington (Mr. Silvester) made a speech of


the highest quality. He has a Rolls-Royce of a mind, and those who, like myself, have to make do with jalopies or bangers as mental equipment are full of admiration for the way in which he moved the amendment. It goes to the heart of the matter. I even wonder whether my hon. Friend was being too politically candid and intellectually honest for his own good.
The truth is, first, that the BAA is hell-bent on having Stansted and develop it rapidly regardless of the environmental consequences, and perhaps even regardless of the actual air transport need. As my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) said, it is great at empire building. However, I doubt whether that is in the national interest. The fact is that, for scheduled traffic, the airports that people want to go to most in the London area are Gatwick and Heathrow. Our policy should maximise the fullest utilisation of those airports. If my right hon. Friend the Secretary of State were to accept the amendment and permit Stansted to be sold separately, the maximum profits from Gatwick and Heathrow could go towards the development of those two airports to the full, not only in their interests, but in the interests of the travelling public from the regions. There are people, such as those who come down from Liverpool, who need to go to Heathrow to interline with intercontinental flights.
Inclusive tour, charter traffic is the main traffic that is likely to be attracted to Stansted. It could be attracted to Stansted only by virtue of the ultra-low charges there, to which my hon. Friend the Member for Christchurch (Mr. Adley) referred, to the detriment of the airports near the towns from which the holidaymakers wish to fly. It is beneficial to the holiday-making public that they should be able to go on holiday from a local airport. Any policy which derogates against that is detrimental to the convenience of passengers in their precious holiday time, but, more important, it is detrimental to good regional development in Britain.
I believe that the policy stinks. The north of Britain is woefully economically deprived. There is a huge economic gulf between the south-east and the north. Why should people be artificially attracted to airports such as Stansted, which they do not wish to use, when the north is crying out for the jobs and the infrastructural development that is associated with airports?
I hope that my right hon. Friend the Secretary of State will think again. Many airports, such as nearby Luton, run the risk of seeing the developments which they have initiated over the years being negated by the artificial development of Stansted. I am convinced that if Stansted were to operate independently, that would be in the national as well as the local interests, which were so eloquently set out by my hon. Friend the Member for Saffron Walden.

Mr. David Model: It is not just a matter of the inconvenience to the travelling public if Stansted were subsidised to a low level. Such subsidy jeopardises many thousands of jobs at Luton airport which are vital to Bedfordshire. In view of all the difficulties last month about another industry, I need hardly stress the importance of keeping jobs at Luton airport.

Mr. Wilkinson: I am sure that my hon. Friend is right.

Mr. Lambie: I am a Scottish Member of Parliament and a representative of the regional airports in Scotland.

I believe that the future of the four Scottish airports—three Lowland airports and Aberdeen airport—will depend upon tying up with the London airports: Heathrow, Gatwick and Stansted.
There is no competition between the Scottish and London airports. If we are to maintain the United Kingdom as a centre of international air transport, the competition will be between London airports and the continental airports. I have enough confidence in the future growth of international air traffic to believe that there is enough traffic to sustain not only Heathrow and Gatwick but Stansted.
We can develop the northern airports by utilising the facilities that we have. Unfortunately, in Scotland we have three Lowland airports which serve a population of only 5 million. We cannot compete with London. Indeed, we cannot compete with Manchester airport, which serves an area with a population of 20 million. Glasgow and Prestwick airports cannot compete with Manchester, but they can be complementary to Manchester. We cannot compete for traffic with the London airports, but we can be complementary to them.
Due to the lead up to privatisation, British Airways is being forced to subsidise the development of independent airlines to and from the Scottish airports. Every day in the newspapers we see new airlines being designated to serve Glasgow and Edinburgh airports and to build up communications with the continental airports. The latest airline link is between Glasgow airport and Dusseldorf. A new company is being developed to link Edinburgh and Glasgow airports with continental airports. Therefore, there is a future for the Scottish airports. If one has confidence in the growth of international and national air transport, there is a piece of the cake for every airport in the United Kingdom.
In the United Kingdom both Labour and Conservative Governments have prevented people in some areas from developing their native talents in the hope that other areas would develop in their place. Even a Labour Government stopped development in the south of England in the hope that that development would shift to the north of England and to Scotland. That has never happened. It might happen in a period of economic growth, but in times of economic restraint companies which have moved to Scotland and to the north of England move back to the midlands and the south-east of England.
We must now support policies based on confidence in Britain's future and the growth of national and international airlines serving the United Kingdom. That is why, as a Scottish Member of Parliament, I do not object to the build-up of Stansted. The south-east of England needs Stansted, as it needs Heathrow and Gatwick. But I want the Government to change their economic policy and to go for growth not only in airlines and airports but in economic activity. If they do that, there will be a share of the cake for everyone.
I see the future of the Scottish airports being tied to the airports in the south of England. Let us go for growth. Let us develop the airports in the south-east of England. If that happens, Manchester and the Scottish airports will develop and we shall all be lucky. Let us not repeat the policies that have been carried out over the past 45 years of stopping developments in certain areas in the hope that they would move to other areas. That has not happened in the past and it will not happen in the future.
I am against the amendments. If they are accepted, they will be bad not only for the Scottish airports and their future, but for the future of the aerospace industry in the United Kingdom.

Mr. Bill Walker: I shall not take up in detail what the hon. Member for Cunninghame, South (Mr. Lambie) has been saying, but I too am a Scottish Member of Parliament and I was disappointed that we were unable to debate new clause 10 which related almost exclusively to Scotland and the Scottish airports. But amendment No. 3 deals with the airports operating in Scotland and says that they should not be regarded as serving the same area. Of course, anyone who knows the four airports in Scotland knows that they do not serve the same area and in that sense they do not compete with each other.
The nub of the issue is whether one accepts that, according to the Government, the London airport system consists of Stansted—the lowest in the order of priority—Gatwick, and then Heathrow, which is the jewel in the crown. It could be argued that, looking at a map, Luton is close enough to London also to be considered as a London airport, but it is not, conveniently, owned and operated by the BAA. Otherwise, the probability is that it too would belong to that so-called system.
Anyone who studies that so-called system will realise that the airports have evolved because airlines wish to go there. That is important. The airlines wish to go to those airports and there were inducements to the airlines to do certain things. It was suggested initially that Gatwick would be largely a charter operation and it was developed extensively by the charter operators. Subsequently, however, non-charter services have gone there. The scheduled services have gone there, and there is the beginning of a hub and spoke operation. It is believed that it is possible simply to decant airlines from Gatwick or Heathrow into Stansted and, as if by magic, produce a hub and spoke operation. Those who believe that do not realise how airports have developed and are likely to develop, or how much damage such management can do to the free market forces that the Government support.
10.15 pm
I believe that Stansted will develop because charter airlines will want to go there. The question is whether they will have been persuaded to go there. In the absence of real direction, the usual persuasion is the offer of lower landing charges, and other facilities that are much cheaper than those offered by the obvious competitors.
The first airport to be at risk in that respect must be Luton. Other airports will be affected, too. Birmingham, for instance, services a similar catchment area. When one considers all that, one realises that the system is designed to enable the BAA to do what it wants with its empire. It has little to do with the needs and wishes of air transport itself. Left to its own devices, air transport would develop without anyone directing anyone else to go anywhere. The main airports are not yet saturated.
I therefore approve of amendment No. 3, to which I have put my name, and I am prepared to support it in the Division. I believe that anyone who tries to make comparisons among airports is comparing apples with oranges. We cannot run an airport transport system in that way.
I am pleased that my right hon. and hon. Friends on the Front Bench are attempting at last to give us a comprehensive and understandable aviation policy. In

doing so they are bound to make some friends and, indeed, some enemies. It has become clear this evening that there are many who would favour allowing Stansted to operate independently rather than in some sort of transparent accounting framework. Anyone who knows anything about accounts knows that things that are supposed to be transparent often turn out on closer inspection to be rather opaque. It is possible to fudge.
I hope that those on the Front Bench have heard the message. There is deep concern in the House that we should not privatise the airports as a group simply because we think that we would get a better deal by doing so. I commend my right hon. Friend for grasping the nettle. I hope that the endeavour will no falter because we find ourselves doing what the BAA wants and not what we believe is best for competition, the airlines, the airports and customers.

Sir Ian Percival: This is a strange debate. In common with my right hon. and hon. Friends on the Front Bench, all my hon. Friends who have spoken really believe in the need for, and the desirability of, competition. We really believe that the enterprises that succeed should be those that provide services that people want at a price that they are willing to pay. We also believe in the other side of the coin. We deplore monopolies and unfair competition.
Damascus had nothing in comparison with tonight. We are happy to be joined in these beliefs by right hon. and hon. Members on the Opposition Benches. What we do not understand is why the Government do not share those views with us this time.
I do not want to make this a dispute between the north and the south. Manchester must compete with Stansted, Luton and everywhere else. We can and will compete. However, we are entitled to expect that we will not be disadvantaged in doing so. We are entitled to expect that in absolute and general terms. We are especially entitled to expect it because, as everyone knows, we do have some problems that other places do not have. We are doing our best to fight them, and we deserve to be supported rather than disadvantaged.
I do not think that the division between the north and the south is anything like as great as some people suggest. However, I warn my right hon. and hon. Friends that the provisions in the Bill are likely to make any division there is greater, and none of us wants that. That is another reason for accepting our proposal.
It is plain that unless Stansted is a free-standing operation we shall be disadvantaged. No one can disguise that. I give my right hon. Friend credit because he has recognised that danger and has gone some way to try to find a solution. That makes it even more difficult to understand why he will not come this one further step with us. He has recogised the danger that we will be disadvantaged and has tried to find a solution. It is clear that he has not succeeded, despite his efforts. What we are asking for would provide a solution.
If it is free-standing, the airport will grow at the rate required if it responds to market forces. If there is the need that there is said to be, and if somebody is efficient in meeting that need, there will be the necessary growth. If someone provides the services that are required—or so we are told—at a price which people are willing to pay, it will survive as a free-standing operation. If it cannot so survive, by our test it should not survive.
We are told that the need is so great that it must be met quickly or there will be trouble. If that is not true, what are we worrying about? If it is true, and if I were a buyer who believed that I could run an efficient operation, I would not have too much trouble in selling shares. So why is it feared that the so-called demand will not be satisfied quickly enough? It is because it is believed that it can be met quickly enough only if it is subsidised. It cannot be met on commercial lines, only on non-commercial lines.
I do not like to see my right hon. and hon. Friends supporting that proposition. They know that I am not a rebel; I am not one who goes into the Lobby for the fun of it or to get my name in the newspapers. However, I shall go into the Lobby tonight because I do not think that the fate of the Government hangs on this issue. I wish that they would come with us and say, "We are persuaded, too, like some others on the road to"—[AN HON. MEMBER: "Mandalay."] That is an insight into what is required. I wish that the Government would come with us on this issue.
I hope that my hon. Friends who support the amendment will press it to a Division. It is the only way to show the strength of our feeling. As I have said, I do not regard it as an issue likely to bring down the Government. Our object is to bring home to the Government that we respect their desire to meet the difficulty, we do not think that they have met it, and so we want them to come a stage further with us to meet it. We are prepared to back that view with our votes, even though there is a three-line Whip.

Mr. Tony Lloyd: Since the Secretary of State is making one of his rare appearances on this Bill I would ask him to justify the things that he has not so far taken the trouble to justify—should he be courteous enough to listen to me as he has not done to anyone else so far. How is it that, of his hon. Friends who have spoken tonight, only the one who is a Parliamentary Private Secretary has spoken in support of what he intends to do? We have not had answers to any of the questions raised in Committee or beforehand about the whole issue of cross-subsidisation. Will the Secretary of State give a simple answer to one question? Should he resist these amendments tonight, what requirement will he insert to guarantee that the accounts of Stansted airport are publicly available? The Secretary of State has come alive! What guarantee will he give that the accounts of Stansted airport will be publicly available, so that hon. Members can draw their own conclusions about the basis of the subsidisation that will take place?

Mr. Robert Hughes: There have been two main strands in this very interesting debate. The first has come mainly from Conservative Members who have argued that the Bill as it stands is inadequate because it fails to reflect their wish for a proper policy on private competition; the second strand has come primarily from the Labour Benches, expressing the belief that fairness and equality are necessary in the discussions and in the competition between the regional airports and the London airports, particularly Stansted.
I am totally in favour of a balanced airport development. I want to see encouragement of the growth of regional airports—Manchester, Birmingham, Newcastle, Prestwick or wherever. They should all have

a fair chance to develop. They should certainly not be starved of funds; they should be in a position to provide adequate facilities, comparable with those provided by other airports.
Patently, Government policy is against fair competition. As the Bill stands, and if it passes through this House and the other place without amendment, regional airports will have to operate with one hand tied behind their backs: as long as the majority ownership is in the hands of local authorities, the airports will be subject to local government expenditure restraints. The Government will be able to control the pace of development at regional airports by keeping the purse strings tight.
The Government's answer to that is simple. They say that under the new structure the local authority airports can escape from controls by selling equity capital to a total of more than 50 per cent. At that point they will be free of restraint as regards raising money in the private market. This is one of the most reprehensible parts of the Bill, because it is nothing less than blackmail. It is compelling local authorities to undertake a course with which they do not want to proceed. It is quite disgraceful that the Government should operate in this way.
The regions have cause for concern. That is what is at the heart of this debate. Their concern is about what will happen to traffic and to development. I agree with my hon. Friend the Member for Cunninghame, South (Mr. Lambie) that the growth in international traffic is likely to be of an order to satisfy everyone, that the regional airports, the London airports and Stansted can get a proper and fair share of the available traffic, and that, all things being equal, there is not necessarily a contradiction between development at Stansted and development at regional airports. But that will only be the case, if there is fair competition and if there are no restraints on the development of regional airports. In the short term, I fully understand why the regional airports should be concerned that Stansted will drain traffic away, that it will not only inhibit growth at Manchester and elsewhere, but will actually take away some of the existing traffic.
If we look at the recent Civil Aviation Authority report on access to Heathrow from regional airports, we have grounds for concern. It is reported, for example, that because of the heavy congestion at Heathrow the first of the services to be taken out of Heathrow will be the links between Dundee and Inverness. Next there is a threat to services from Guernsey, the Isle of Man, Plymouth, Newquay and Jersey. It is further proposed that if that does not deal with the congestion, there will be restrictions on flights to Heathrow from all the United Kingdom regional airports with the exception of Glasgow, Edinburgh and Belfast. If there is restriction of traffic into Heathrow, the extra traffic will have to go to Stansted. Therefore, there is a strong feeling among many hon. Members that Stansted will disturb the efforts of regional airports to maintain or improve services.
10.30 pm
The problem arises because the Government do not have an airport policy. They simply say, "Leave it to the free market and it will all sort itself out." The fact that there may be casualties on the way is just too bad. The curious thing is that while the Government are saying that, on the one hand, in other parts of the Bill a labyrinth of controls is being built up to inhibit competition. The Government are trying to have their cake and eat it. It is


not surprising that many Members in all parts of the House are concerned for different reasons about the effects of Stansted and the way it will develop.
I cannot ask my hon. Friends to support amendment No. 3. As I understand it, it would mean that the three London airports would be sold off to totally independent companies. I am totally opposed to that. I want one company to be responsible for the seven main airports; whoever owns them, they must stay together. That is my view not just because of my Scottish connections but because of general future development.
My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) has put forward a full and fair case on amendment No. 1. All my hon. Friends representing regional airports are asking for no more than fair treatment. They are entitled to such treatment. For that reason, I shall certainly ask them to support amendment No. 1 in the Lobby tonight.

Mr. Ridley: We have had a full and high quality, if not totally unfamiliar, debate on this issue, which has been before the House for nearly a year. Little new argument has been put forward, but old arguments have been repeated with renewed force and skill.
I take exception to one speech, that of my hon. Friend the Member for Christchurch (Mr. Adley), who said that the tacit agreement that had been reached last June when the airports White Paper was published had not been kept. That I must repudiate. I believe that the contents of the Bill are almost identical in every material respect both to the statement that I made on 5 June and to the White Paper that was issued on that day, towards which hon. Gentlemen felt less unenthusiastic than they appear to feel tonight.
My hon. Friend the Member for Manchester, Withington (Mr. Silvester) made an accomplished speech; so accomplished that he managed to accuse me of being a wet. If bringing massive help to Manchester airport is the tactic of a wet, I plead guilty. I have presided—if that is the right word—over a period when massive investment—far greater than under the Labour party—has taken place in all the regional airports. I have done everything that I could to promote the real source of growth for regional airports—the provision of more traffic by the opening up of more routes.
I persuaded British Airways to subsidise 14, I think it was, routes out of regional airports by new operators. I allowed many international routes into Manchester. I think that 14 extra routes are now operating from Manchester. It is that traffic that brings the prosperity, that brings the extra jobs. That is not what we are talking about today. The debate today is about how we should treat Stansted. If that is the sort of thing that a wet does, I plead guilty, with pleasure, to my hon. Friend.

Mr. Churchill: It would be churlish of those of us who represent north-west constituencies not to pay a tribute to my right hon. Friend for the tremendous work that he has done on behalf of Manchester, from which today one can fly to twice as many scheduled destinations as one could this time a year ago. None the less, does my right hon. Friend deny that Stansted, over the years, has been built up by a system of cross-subsidies from Heathrow and Gatwick, at the expense of Manchester and other regional airports? And is it not the purpose of the Bill as it is drafted to allow this cross-subsidisation to continue?

Mr. Ridley: If my hon. Friend and the right hon. Member for Manchester, Wythenshawe (Mr. Morris) will allow me, I have a lot to say on this matter of the alleged cross-subsidy, on which they concentrated, but I would rather take my speech in my own order, and I must try to be as brief as possible.
The best speech was that by the hon. Member for Cunninghame, South (Mr. Lambie), who only asked one thing of the Government, and that was a high rate of economic growth. He will be delighted to know that we are now into our fifth consecutive year of growth, but that perhaps is outside the scope of this debate.
I am not proposing to keep the seven airports together in order to maximise profits so that we can get the most out of the sale. Nor am I doing it because I have given way, as has been alleged, to the BAA or its chairman. I am doing it because I am trusting my instincts, as my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) asked me to do.
I shall make three points in passing. First, the amendments are technically defective, but I shall not rest on that. Secondly, the hon. Member for Liverpool, West Derby (Mr. Wareing) said that he saw Liverpool and Manchester as an airport system. They are in competition, close together as they are, but they are an airport system. Thirdly, and most astonishing of all, amendment No. 3 exempts the four Scottish airports from the requirement to be privatised separately. Three of them at least—Glasgow, Prestwick and Edinburgh—can be regarded only as a system. Thus, when it comes to Scotland and the north-west, airports are a system and cannot be made to compete, but when it comes to London, the biggest conurbation, the biggest system of the lot, everything is different.

Mr. Tony Lloyd: I am amazed at the Secretary of State's seeming ignorance of the airports system in Britain. Is he suggesting that the argument about cross-subsidisation applies between Manchester airport and Liverpool airport? If he is, he is even more ignorant than I thought he was.

Mr. Ridley: I hesitated before I gave way, and I made a mistake. I should not have given way, because I have made it clear that I am coming to the cross-subsidy argument. If hon. Gentlemen will be patient, I shall give way after I have dealt with that point.

Mr. Bill Walker: I hope that my right hon. Friend will not suggest that the three London airports which form a system into which all international flights can fly can be compared to Scotland. In Scotland, that is not the case. That cannot be done in Scotland. In fact, trans-Atlantic flights can fly only into Prestwick.

Mr. Ridley: The Scottish airports operate as a system, as indeed do the London airports, and that is why they should stay together.
Why is it that all airlines want to serve Heathrow? It is considerably more expensive than Stansted or Gatwick. It is much harder to get the slot that one wants at Heathrow. The standards, to be polite, are no higher than at Gatwick, and the roads and car parks are congested at Heathrow. Yet all airlines and passengers want to go to Heathrow rather than to any of the other London airports. The reason is that it accommodates the maximum number of interlining aircraft. Also, Heathrow is thought, not


always truthfully, to be the quickest and easiest London airport to get to. It follows from that that one really cannot believe that there is any form of meaningful competition between Heathrow and, say, Gatwick or Stansted, in the sense that one could increase or decrease prices at Heathrow, or improve the services or cause them to deteriorate, and by that means affect the natural and enormously strong preference, or even prejudice, that exists for using Heathrow out of the three airports in that system.
As the hon. Member for Cunninghame, South said, the competition is not between Heathrow, Gatwick and Stansted. It is between the London system, the Paris system, the Amsterdam system, and so on. Of course, 20 per cent. of Heathrow traffic is interlining traffic. Why else do the Dutch mount a roadshow to try to show the advantages of Schiphol? Why does Frankfurt advertise in The Times its advantages at such expense if not to try to take the lucrative interlining traffic away from the London system?
The hon. Members for Dundee, West (Mr. Ross) and for Workington (Mr. Campbell-Savours), and people from many other parts of the country, are alarmed that the Civil Aviation Authority, in its first draft review of the traffic distribution policy, has suggested that certain domestic air flights should not go into Heathrow, but should go elsewhere. Whatever is decided about these matters—the interlining or the routes into Heathrow—it affects the profitability of Heathrow and the profitability of the other airports.
How can one write a prospectus for Heathrow, Gatwick and Stansted if we first decide the question of domestic flights and later decide what the traffic distribution policy will be? We will affect profitability. This constant change in emphasis in aviation policy must be accommodated within three airports. It is easy if it is a system, but if each airport's fortunes depend on each decision, and if the competition is upset by each decision, it becomes impossible both to write a prospectus for privatisation and to justify the changes which affect the profitability of each airport.
I must ask the House why there is so much concern. Over the past six years, when Stansted has veritably been heavily subsidised, Manchester's traffic has grown from 3·5 million passengers per annum to 6 million, whereas the number of Stansted's passengers has remained at 500,000. Despite the massive subsidy, it is Manchester that has grown and not Stansted. Therefore, it is difficult to complain particularly if I now give the House the assurance it has sought that there will be no subsidy from the other London airports to Stansted. The hon. Member for Manchester, Central (Mr. Litherland) talked about a massive subsidy, but this will not be the case.
I shall now consider what is in the Bill.
The accounts must, under clause 37, be transparent and apply to each separate airport company. They will be Companies Acts accounts, audited by auditors, and, in answer to the hon. Member for Stretford (Mr. Lloyd), they will be publicly available for all to see.
10.45 pm
There can be cross-investment only at commercial rates. Perhaps I might quote the chairman, Sir Norman Payne, who said:

The 1986 charges are the first step in a series of steps which the BAA intends to take to raise Stansted's charges to a level which reflects the cost of the new development, in order that a proper return is achieved on the new investment.
That policy is already in effect.
There are other amendments which will not, as my hon. Friend the Member for Withington suggested, underpin the defences against transparency. They will give the CAA fuller powers still to prevent predatory pricing. The CAA will police matters to ensure that there is no subsidy to Stansted. There will be investment only in the initial loss-making period.

Mr. Geoffrey Dickens: My tendency at the moment is to vote against the Government, because I have not been satisfied thus far. Gatwick, Stansted and Heathrow could raise money as a block because of their profitability. They would therefore have the advantage over Manchester for expansion. The regional airports are worried about the London airports' ability to raise cheap money because they are being sold as one big block.

Mr. Ridley: I should very much like to get the weight of my hon. Friend on my side in the Division Lobby, so I shall explain the matter to him. Manchester and other local authority airports have been able to raise money through local authorities at rates which have been close to the Government's borrowing rate, and considerably cheaper than the rate at which any private sector company would be able to raise money. The security of Manchester airport, when owned by the local authority, is the same as the security of the Government, so in terms of security and cheapness of borrowing Manchester airport will have the edge over the BAA.
It is time that I asked the House to reject these amendments. I have put up arguments which I hope will be found convincing in all quarters of the House.

Mr. Alfred Morris: With permission, Mr. Deputy Speaker, I should like to reply. The Secretary of State has manifestly disappointed his right hon. and hon. Friends, not to mention my right hon. and hon. Friends. He was virtually friendless in the debate, and wholly unconvincing in his reply. We have won the debate. Let us hope that we can win the vote.

Question put, That the amendment be made:

The House divided: Ayes 203, Noes 266.

Division No. 128]
[10.50 pm


AYES


Adams, Allen (Paisley N)
Brown, N. (N'c'tle-u-Tyne E)


Adley, Robert
Brown, R. (N'c'tle-u-Tyne N)


Archer, Rt Hon Peter
Buchan, Norman


Ashdown, Paddy
Buck, Sir Antony


Ashley, Rt Hon Jack
Caborn, Richard


Ashton, Joe
Callaghan, Rt Hon J.


Atkinson, N. (Tottenham)
Callaghan, Jim (Heyw'd &amp; M)


Bagier, Gordon A. T.
Campbell, Ian


Banks, Tony (Newham NW)
Campbell-Savours, Dale


Barnett, Guy
Canavan, Dennis


Barron, Kevin
Carlile, Alexander (Montg'y)


Beckett, Mrs Margaret
Carlisle, John (Luton N)


Bennett, A. (Dent'n &amp; Red'sh)
Carlisle, Rt Hon M. (W'ton S)


Bermingham, Gerald
Carter-Jones, Lewis


Bidwell, Sydney
Cartwright, John


Biggs-Davison, Sir John
Churchill, W. S.


Blackburn, John
Clark, Dr David (S Shields)


Blair, Anthony
Clarke, Thomas


Boyes, Roland
Clay, Robert


Bray, Dr Jeremy
Clelland, David Gordon


Brown, Gordon (D'f'mline E)
Clwyd, Mrs Ann


Brown, Hugh D. (Provan)
Cocks, Rt Hon M. (Bristol S)






Cohen, Harry
McCartney, Hugh


Cook, Frank (Stockton North)
McCrindle, Robert


Cook, Robin F. (Livingston)
McCurley, Mrs Anna


Corbett, Robin
McKelvey, William


Corbyn, Jeremy
McNamara, Kevin


Craigen, J. M.
McTaggart, Robert


Cranborne, Viscount
McWilliam, John


Cunningham, Dr John
Madden, Max


Dalyell, Tam
Madel, David


Davies, Ronald (Caerphilly)
Marek, Dr John


Davis, Terry (B'ham, H'ge H'l)
Marshall, David (Shettleston)


Dewar, Donald
Martin, Michael


Dickens, Geoffrey
Maxton, John


Dicks, Terry
Maynard, Miss Joan


Dixon, Donald
Meadowcroft, Michael


Dormand, Jack
Michie, William


Douglas, Dick
Mikardo, Ian


Dubs, Alfred
Millan, Rt Hon Bruce


Duffy, A. E. P.
Miller, Dr M. S. (E Kilbride)


Eastham, Ken
Mitchell, Austin (G't Grimsby)


Evans, John (St. Helens N)
Montgomery, Sir Fergus


Ewing, Harry
Morris, Rt Hon A. (W'shawe)


Farr, Sir John
Morris, Rt Hon J. (Aberavon)


Fatchett, Derek
Nellist, David


Faulds, Andrew
Oakes, Rt Hon Gordon


Favell, Anthony
O'Neill, Martin


Field, Frank (Birkenhead)
Orme, Rt Hon Stanley


Fields, T. (L'pool Broad Gn)
Park, George


Fisher, Mark
Parry, Robert


Flannery, Martin
Patchett, Terry


Foot, Rt Hon Michael
Peacock, Mrs Elizabeth


Forrester, John
Penhaligon, David


Foster, Derek
Percival, Rt Hon Sir Ian


Franks, Cecil
Pike, Peter


Fraser, J. (Norwood)
Powell, Raymond (Ogmore)


Freeson, Rt Hon Reginald
Prescott, John


Galley, Roy
Pym, Rt Hon Francis


George, Bruce
Radice, Giles


Godman, Dr Norman
Redmond, Martin


Golding, John
Rees, Rt Hon M. (Leeds S)


Gould, Bryan
Rhodes James, Robert


Gourlay, Harry
Richardson, Ms Jo


Grant, Sir Anthony
Robertson, George


Griffiths, Sir Eldon
Robinson, G. (Coventry NW)


Hamilton, James (M'well N)
Rogers, Allan


Hamilton, Neil (Tatton)
Rooker, J. W.


Hamilton, W. W. (Fife Central)
Ross, Ernest (Dundee W)


Hampson, Dr Keith
Ross, Stephen (Isle of Wight)


Hargreaves, Kenneth
Sedgemore, Brian


Harrison, Rt Hon Walter
Sheerman, Barry


Haselhurst, Alan
Shore, Rt Hon Peter


Hayes, J.
Short, Ms Clare (Ladywood)


Haynes, Frank
Short, Mrs R.(W'hampt'n NE)


Hicks, Robert
Silkin, Rt Hon J.


Hind, Kenneth
Silvester, Fred


Hogg, N. (C'nauld &amp; Kilsyth)
Skeet, Sir Trevor


Home Robertson, John
Skinner, Dennis


Howarth, Gerald (Cannock)
Smith, C.(Isl'ton S &amp; F'bury)


Howells, Geraint
Snape, Peter


Hughes, Dr Mark (Durham)
Stevens, Lewis (Nuneaton)


Hughes, Robert (Aberdeen N)
Stott, Roger


Hughes, Roy (Newport East)
Strang, Gavin


Hughes, Sean (Knowsley S)
Straw, Jack


John, Brynmor
Thomas, Dafydd (Merioneth)


Jones, Barry (Alyn &amp; Deeside)
Thomas, Dr R. (Carmarthen)


Kaufman, Rt Hon Gerald
Thompson, J. (Wansbeck)


Kellett-Bowman, Mrs Elaine
Thorne, Stan (Preston)


Kennedy, Charles
Tinn, James


Kilroy-Silk, Robert
Torney, Tom


Kirkwood, Archy
Walker, Bill (T'side N)


Knox, David
Wardell, Gareth (Gower)


Lambie, David
Wareing, Robert


Lamond, James
White, James


Leighton, Ronald
Whitfield, John


Lewis, Terence (Worsley)
Wigley, Dafydd


Livsey, Richard
Wilkinson, John


Lloyd, Tony (Stretford)
Williams, Rt Hon A.


Loyden, Edward
Wilson, Gordon





Winnick, David
Tellers for the Ayes:


Young, David (Bolton SE)
Mr. Robert Litherland and



Mr. Malcolm Thornton.

NOES


Aitken, Jonathan
Freeman, Roger


Alexander, Richard
Fry, Peter


Alison, Rt Hon Michael
Gardiner, George (Reigate)


Amess, David
Gardner, Sir Edward (Fylde)


Ancram, Michael
Garel-Jones, Tristan


Arnold, Tom
Gilmour, Rt Hon Sir Ian


Ashby, David
Goodlad, Alastair


Aspinwall, Jack
Gow, Ian


Atkins, Rt Hon Sir H.
Gower, Sir Raymond


Atkins, Robert (South Ribble)
Greenway, Harry


Atkinson, David (B'm'th E)
Gregory, Conal


Baker, Rt Hon K. (Mole Vall'y)
Griffiths, Peter (Portsm'th N)


Baker, Nicholas (Dorset N)
Grist, Ian


Baldry, Tony
Ground, Patrick


Beaumont-Dark, Anthony
Grylls, Michael


Bellingham, Henry
Gummer, Rt Hon John S


Bendall, Vivian
Hamilton, Hon A. (Epsom)


Benyon, William
Hanley, Jeremy


Best, Keith
Hannam, John


Bevan, David Gilroy
Harris, David


Biffen, Rt Hon John
Hawkins, C. (High Peak)


Blaker, Rt Hon Sir Peter
Hawksley, Warren


Bonsor, Sir Nicholas
Hayhoe, Rt Hon Barney


Bottomley, Mrs Virginia
Heathcoat-Amory, David


Bowden, A. (Brighton K'to'n)
Henderson, Barry


Bowden, Gerald (Dulwich)
Heseltine, Rt Hon Michael


Brandon-Bravo, Martin
Hickmet, Richard


Brinton, Tim
Higgins, Rt Hon Terence L.


Brooke, Hon Peter
Hill, James


Browne, John
Hogg, Hon Douglas (Gr'th'm)


Bruinvels, Peter
Holland, Sir Philip (Gedling)


Bryan, Sir Paul
Holt, Richard


Buchanan-Smith, Rt Hon A.
Hordern, Sir Peter


Budgen, Nick
Howard, Michael


Bulmer, Esmond
Howarth, Alan (Stratf'd-on-A)


Burt, Alistair
Howell, Ralph (Norfolk, N)


Butcher, John
Hubbard-Miles, Peter


Butler, Rt Hon Sir Adam
Hunter, Andrew


Butterfill, John
Jackson, Robert


Carlisle, Kenneth (Lincoln)
Jenkin, Rt Hon Patrick


Carttiss, Michael
Jessel, Toby


Cash, William
Jones, Gwilym (Cardiff N)


Chalker, Mrs Lynda
Jones, Robert (Herts W)


Channon, Rt Hon Paul
Joseph, Rt Hon Sir Keith


Chope, Christopher
Key, Robert


Clark, Hon A. (Plym'th S'n)
King, Roger (B'ham N'field)


Clark, Sir W. (Croydon S)
Knight, Greg (Derby N)


Clarke, Rt Hon K. (Rushcliffe)
Knight, Dame Jill (Edgbaston)


Cockeram, Eric
Knowles, Michael


Colvin, Michael
Lamont, Norman


Conway, Derek
Lang, Ian


Coombs, Simon
Latham, Michael


Cope, John
Lawler, Geoffrey


Couchman, James
Lee, John (Pendle)


Currie, Mrs Edwina
Leigh, Edward (Gainsbor'gh)


Dorrell, Stephen
Lennox-Boyd, Hon Mark


Douglas-Hamilton, Lord J.
Lewis, Sir Kenneth (Stamf'd)


Dover, Den
Lightbown, David


du Cann, Rt Hon Sir Edward
Lilley, Peter


Dunn, Robert
Lord, Michael


Durant, Tony
Luce, Rt Hon Richard


Dykes, Hugh
Lyell, Nicholas


Eggar, Tim
Macfarlane, Neil


Emery, Sir Peter
MacKay, Andrew (Berkshire)


Eyre, Sir Reginald
McNair-Wilson, M. (N'bury)


Fairbairn, Nicholas
McNair-Wilson, P. (New F'st)


Fallon, Michael
Major, John


Fenner, Mrs Peggy
Malins, Humfrey


Finsberg, Sir Geoffrey
Malone, Gerald


Fletcher, Alexander
Maples, John


Fookes, Miss Janet
Marland, Paul


Forth, Eric
Marlow, Antony


Fowler, Rt Hon Norman
Mates, Michael


Fox, Marcus
Mather, Carol


Fraser, Peter (Angus East)
Maude, Hon Francis






Mawhinney, Dr Brian
Sims, Roger


Maxwell-Hyslop, Robin
Smith, Tim (Beaconsfield)


Mayhew, Sir Patrick
Soames, Hon Nicholas


Mellor, David
Speed, Keith


Merchant, Piers
Spencer, Derek


Meyer, Sir Anthony
Spicer, Jim (Dorset W)


Miller, Hal (B'grove)
Spicer, Michael (S Worcs)


Mills, Iain (Meriden)
Squire, Robin


Miscampbell, Norman
Stanbrook, Ivor


Mitchell, David (Hants NW)
Stanley, Rt Hon John


Moate, Roger
Stern, Michael


Monro, Sir Hector
Stewart, Allan (Eastwood)


Moore, Rt Hon John
Stewart, Andrew (Sherwood)


Morrison, Hon C. (Devizes)
Stewart, Ian (Hertf'dshire N)


Morrison, Hon P. (Chester)
Stokes, John


Moynihan, Hon C.
Stradling Thomas, Sir John


Mudd, David
Sumberg, David


Neale, Gerrard
Tapsell, Sir Peter


Nelson, Anthony
Taylor, John (Solihull)


Neubert, Michael
Taylor, Teddy (S'end E)


Newton, Tony
Temple-Morris, Peter


Nicholls, Patrick
Terlezki, Stefan


Norris, Steven
Thatcher, Rt Hon Mrs M.


Oppenheim, Phillip
Thompson, Donald (Calder V)


Oppenheim, Rt Hon Mrs S.
Thompson, Patrick (N'ich N)


Ottaway, Richard
Thorne, Neil (Ilford S)


Page, Richard (Herts SW)
Thurnham, Peter


Parris, Matthew
Townend, John (Bridlington)


Patten, Christopher (Bath)
Townsend, Cyril D. (B'heath)


Patten, J. (Oxf W &amp; Abgdn)
Tracey, Richard


Pattie, Geoffrey
Trippier, David


Pawsey, James
Trotter, Neville


Pollock, Alexander
Twinn, Dr Ian


Portillo, Michael
van Straubenzee, Sir W.


Powell, William (Corby)
Vaughan, Sir Gerard


Powley, John
Viggers, Peter


Price, Sir David
Waddington, David


Prior, Rt Hon James
Wakeham, Rt Hon John


Proctor, K. Harvey
Waldegrave, Hon William


Raffan, Keith
Walden, George


Rathbone, Tim
Wall, Sir Patrick


Rees, Rt Hon Peter (Dover)
Waller, Gary


Rhys Williams, Sir Brandon
Walters, Dennis


Ridley, Rt Hon Nicholas
Ward, John


Roberts, Wyn (Conwy)
Wardle, C. (Bexhill)


Robinson, Mark (N'port W)
Watts, John


Roe, Mrs Marion
Wells, Sir John (Maidstone)


Rossi, Sir Hugh
Wheeler, John


Rowe, Andrew
Whitney, Raymond


Rumbold, Mrs Angela
Wiggin, Jerry


Ryder, Richard
Wolfson, Mark


Sackville, Hon Thomas
Wood, Timothy


Sainsbury, Hon Timothy
Woodcock, Michael


Scott, Nicholas
Yeo, Tim


Shaw, Giles (Pudsey)
Young, Sir George (Acton)


Shaw, Sir Michael (Scarb')
Younger, Rt Hon George


Shelton, William (Streatham)



Shepherd, Colin (Hereford)
Tellers for the Noes:


Shepherd, Richard (Aldridge)
Mr. Peter Lloyd and


Shersby, Michael
Mr. Robert Boscawen.

Question accordingly negatived.

11 pm

Mr. Ridley: I beg to move amendment No. 4, in page 2, line 24, leave out 'and' and insert 'or'.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take Government amendment No. 5.

Mr. Ridley: These are technical amendments, but I shall explain their effect if the House wishes me to do so.

Amendment agreed to.

Amendment made: No. 5, in page 2, line 35, leave out 'and' and insert 'or'.—[Mr. Ridley.]

Clause 12

TRANSFER OF AIRPORT UNDERTAKINGS OF LOCAL AUTHORITIES TO COMPANIES OWNED BY SUCH AUTHORITIES

Mr. Ancram: I beg to move amendment No. 7, in page 10, line 25, leave out subsection (5) and insert—
'(5) References in subsection (1) to carrying on the business of operating an airport as a commercial undertaking include references to carrying on any activities which, at the time when the direction in question is given, are carried on at the airport or on airport land—

(a) by the principal council, or (as the case may be) any of the principal councils, who control the airport,
(b) by any subsidiary by whom the airport is owned as mentioned in section 11(3),
(c) by any person managing the airport under the terms of any lease or other arangement made by or on behalf of the principal council or councils who control it or by any such subsidiary, or
(d) by any person who has been granted a right to carry on activities there by any council, subsidiary or person falling within any of the preceding paragraphs,

with the exception of any activities which the Secretary of State has, before the date referred to in subsection (2), agreed with the principal council or councils who control the airport should not be carried on by the company to be formed in pursuance of the direction.
(5A) In subsection (5) "airport land", in relation to an airport, means land which is attached to the airport and was on 1st April 1986 administered with the airport as a single unit.'.
Under clause 12(1) the Secretary of State may require a principal council controlling an airport to form a company for the purpose of operating the airport as a commercial undertaking and carrying on
any activities which appear to the council to be incidental to or connected with carrying on that business".
We are concerned that, left as it is, the present wording might allow a principal council—perhaps inadvertently—to take a too narrow view of what activities fall within either clause 12(1)(a) or 12(1)(b) and draw up, accordingly, a narrow memorandum for its public airport company. As a result, the company might be prevented from undertaking the full range of activities that the Government would expect it to undertake and would, indeed, prevent the transfer under clause 14 of the assets used in those activities. Hon. Members concerned will remember the assurances that were given by the Government in Committee that any facility which is part of the necessary equipment of the airport, such as the car park, terminal, duty-free shop or any matter to do with the operation of the airport, such as the fire station, baggage facilities or the freight cargo terminal, will be included in the scheme.
The proposed amendment, by requiring that the business of operating the airport as a commercial undertaking should include any activities carried on at the airport or on airport land, whether by the council, its subsidiary, or manager or a concessionaire, at the time when the direction to form an airport company is given, avoids a too narrow view being taken with the consequence either that the principal council is frustrated in that it cannot transfer relevant activities to the company, or the Government's intention is frustrated for the same reason. Conversely, should the council wish to bring within the ambit of the airport company any activities incidental to or connected with the airport business, but not at the time of the direction part of the airport business,


it may do so under the provisions of clause 12(1)(b), subject, of course, to the Secretary of State's approval of the scheme under the provisions of clause 14.
The provision is necessarily widely drawn, and it is recognised that in some cases it might be better to exclude a particular activity which would fall within the provision. In such a case the activity may, by agreement between the Secretary of State and the controlling authority or authorities, be excluded.
I believe that that clarifies the situation that was referred to in Committee. I ask the House to support the amendment.

Amendment agreed to.

Clause 13

AIRPORTS TO WHICH SECTION 12 APPLIES

Mr. Teddy Taylor: I beg to move amendment No. 9, in page 10, line 36, at end insert
'and if the local authority owner has not already made arrangements for the airport to be managed on a commercial basis by a suitably qualified and experienced operator who is not an employee of a local authority.'.
I am grateful for the opportunity of raising a minor amendment which is vital to the borough of Southend and to at least one other airport owned by a local authority in this country. I am particularly grateful for the support given by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop).
The Minister will be aware that I and my colleague in Southend, the Secretary of State for Trade and Industry, have expressed concern over a small aspect of the Bill. However, I should like to make it abundantly clear that I fully support the objective of the Bill, which is to privatise the British Airports Authority and, more importantly, to bring commercial criteria into the management of services provided by local authorities.
The amendment is simply designed to exempt from the plc requirements those airports, I believe only two in number, which have already been transferred to full commercial and profitable management by the local authority owners. The Minister will be aware from his recent visit that Southend airport is managed commercially and profitably, to the advantage of Southend and its ratepayers, by British Airports International. We have a superb manager, Mr. Gareth Evans, who has transformed the finances of our airport. It is running successfully, profitably and well, and in the interests of the travelling public and the ratepayers of Southend.
The Minister will be fully aware that Southend borough council does not interfere in any way with the running of the airport. I am sure that that will be confirmed by my right hon. Friend the Secretary of State for Trade and Industry who has been constantly in touch with the Department as, of course, have I and Southend borough council. I am sure that my right hon. Friend would also confirm that, far from being opposed to privatisation and commercial practices, the Southend borough council is, in some ways, the ideal borough for those who think that we should have commercial management of our activities. We led the privatisation of local authority services. We introduced the first major privatisation of the cleansing department. That saved the ratepayers about £500,000 in its first year. We have also privatised many of our services. Believe it or not, we have even privatised our

successful and world-famous pier. There has been a major new investment in it, a new train has been established and we are delighted that Princess Anne is opening our new, modernised pier in a few weeks.
Southend has led the field in privatisation and I think that hon. Members will be delighted to hear that, while other councils have been shoving up their rates time and again, Southend borough council reduced its local rate burden this year and I think that it should be congratulated on that.
When we have an airport running commercially by commercial managers without interference from Southend borough council I appeal to the Minister and ask what possible advantage there can be to Southend, the airport, the ratepayers or the travelling public in forcing the council to establish a plc. It seems to be utterly pointless. On Second Reading the Minister told us not to worry because all the shares could be retained by the local authority. It will be a rather strange company with only one shareholder, but the Minister said "Do not worry, all the shares can be retained by Southend borough council."
As you are well aware, Mr. Deputy Speaker, setting up a plc is an expensive business. In Southend, we like to watch our pennies and we ask the Minister what possible advantage there can be to anyone in forcing Southend to establish a plc. I fully accept that in other areas where the local authorities run the airports and perhaps do not do it very successfully or do it at a considerable loss, there is a case for telling them that they have to change and that they have to privatise, put in a plc and change their ways. But why on earth should we in Southend be forced to do that when the airport is already run commercially and profitably?
It is only fair to say to the Minister that in Southend we are becoming a bit worried about the attitude of the Department of Transport to Southend borough council. We have asked it to do only three things recently, and we have got egg on our face every time. We appealed to the Minister on this issue. One of our most successful services was that from Southend to Frankfurt in Germany. There was a plane to Ostend and then a bus from Ostend to Frankfurt. Despite the wonderful Common Market, which is appreciated by many Ministers, the German Government withdrew the licence for the bus service. We appealed to the Government and asked whether they could get any bus service, run by Germans, French, Austrians or Italians. Sadly, the Government were unable to do so, and the service folded. We were rather unhappy in Southend that when we asked, "Could you please do what we are always told the Common Market can do and give us a bus service run by anybody from Ostend to Frankfurt?" the Government were unable to help.
We appealed to the Government again, saying, "Can you help our transport by getting a third Dartford tunnel?" Instead we find the Government expending all their energies on building the silly Channel tunnel, which nobody wants.
Thirdly, we asked the Government whether we could privatise one of our two railway lines to London. We said, "We are so keen on privatisation in Southend: one of our services is run by British Rail. Can a private firm do the rest?" In their manifesto, the Government said that they would encourage British Rail to privatise passenger services. We wanted a little information from British Rail about the figures. We said to the Government, "Will you


ask BR to give us the figures?" The Government said no and that BR was too busy. The privatisation scheme collapsed.
We have had those three refusals from a Minister whom we regard as a real Tory, who believes in privatisation and enterprise. We are beginning to wonder why the Government are picking on us and not helping us in any way in our requests. In this case we ask why we are included in the provision. Why not leave us out?
I should like to know what the Secretary of State meant on Second Reading by saying:
The directors of the airport company will have a duty under the Companies Acts to act in the best interests of the company, which may not necessarily coincide with the interests of their own local authority."—[Official Report, 27 January 1986; Vol. 90, c. 695.]
That is what sends a shiver down our spines. The one thing that we have asked our airport and our commercial managers to do is have some regard for the people of Southend in the way in which they operate the airport.
Of particular concern to my constituents and those of my right hon. Friend the Member for Southend, West (Mr. Channon), who has taken such an interest in the matter, as he always does in Southend affairs, is the possibility of increased night flights and increased airport noise. Obviously my right hon. Friend the Secretary of State for Trade and Industry, cannot speak on the matter, although I am sure that he would love to do so, but I am sure that we would both like to say: can we have an assurance that, if we are forced to set up a plc, the local authority will still have the power, as a local authority, through planning procedures, to control any upsurge in night flights, which would cause serious concern to the people of Southend? That is one thing on which we need an assurance.
Will the Government put any pressure on Southend borough council, if it is forced to become the sole shareholder of this remarkable new plc, to sell the shares to anybody else? Having built up a successful airport, managed privately and profitably, will we be forced to sell the shares to anyone else?
In view of the great confusion about what is required by the Government and why it has been required, will the Minister be willing to have a discussion with us so that we in Southend could try to find out from him what is involved? I may have been slightly unfair, because it may all be a misunderstanding. Perhaps the Government intend to accept my sensible amendment. We in Southend do not object to the Bill. It is a policy that we have been applying. It is a move towards commercial practice, privatisation and so on. We accept this. We do not oppose this, but we have gone ahead of the Government and have decided that our airport should be managed commercially and privately by and organisation which is not controlled in any way by the Southend borough council and does not have any employees of the Southend borough council.
11.15 pm
What possible advantage can there be in forcing the borough council to spend some of its carefully collected resources on setting up a plc? I know what the Government are trying to do in this clause and I support it but I think they may have made an error in including Southend.

Mr. David Ashby: Never.

Mr. Taylor: I can think of no possible argument—

Mr. Ashby: Does my hon. Friend agree that the job of the local council is to provide services and that it is not part of a local council's duty to start providing and running businesses? An airport is run as a business and therefore is it not right that the business should be floated off and not run by the local council?

Mr. Taylor: We do provide commercial services. If my hon. Friend had a local authority which was as successful as Southend, he would have a greater smile on his face. I wonder whether his local authority cut its rates this year? Has his local authority privatised most of its local services?

Mr. Ashby: No.

Mr. Taylor: My hon. Friend would be better employed in inviting his local authority to come on an official visit to Southend to see how a local authority should be run instead of criticising what I am saying.
Southend is a loyal supporter of the commercial policies of the Government and we believe we have given a lead to local authority management in privatisation, profitability and commercial practice. We ask the Government to relieve us of this nonsensical duty to establish a plc with one shareholder. It will bring no benefits to Southend, to the travelling public or to the ratepayers. I hope the Minister will accept this minor amendment.

Mr. Robin Maxwell-Hyslop: My hon. Friend the Member for Southend, East (Mr. Taylor) has deployed the general case which could be applied with equal force to Exeter airport, which is owned by Devon county council.
Exeter airport is extremely ably managed by a commercial company, British Airports International, under an able and experienced manager. It is not only run as an excellent and increasingly excellent business, but it ties in with the policies of the county council under successive administrations—first Conservative and presently a coalition between the Liberals and the Labour party. The county council's policy on this issue has not changed with the change in political control.
All that will be achieved by including Exeter airport within the scope of the Bill will be to interpose an expensive company structure between the present extremely efficient commercial management and the county council. The county council needs to work closely with the airport's commercial management for the purpose of road improvements and the supply of facilities such as policing, through the police authority.
There is bound to be a necessary and close link between the two. Exeter airport may be taken within the ambit of the Bill. Neither the amendments which would have removed it in terms of turnover—the £6 million turnover amendment or the £3 million turnover amendment—have been selected. That is not an avenue open to us to debate or indeed to divide on. Instead, on page 10, after line 36, our amendment states:
and if the local authority owner has not already made arrangements for the airport to be managed on a commercial basis by a suitably qualified and experienced operator who is not an employee of a local authority.
The Government ceaselessly enjoin on local government, including Devon county council, the utmost economy in its administration. That is the posture that is achieved at the moment vis-a-vis Exeter airport. So, to


reject the amendment would be to go counter to the explicit injunctions of my right hon. Friend the Secretary of State for the Environment upon Devon county council as to how it is to arrange its affairs so as to run them at minimum cost.
I am not disputing the suitability of the Bill for the great London airports and many large airports throughout the country. However, it is too often a bad habit of the Government to look at structures in London or the great conurbations and, having satisfied themselves that those require a certain legislative solution and framework, to apply that willy-nilly throughout the United Kingdom, whatever the local conditions may be.
It is most probably the case that when the Bill was drafted the Government did not have in mind Exeter and Southend airports and their particular circumstances, and, of course, officials in Departments never like making exceptions. We would not wish to hybridise the Bill by making the exceptions by name. That would have been an extremely mischievous form of amendment and it would rightly have been rejected on those grounds. But the amendment does no violence at all to the purpose of the Bill. It is the best solution for efficient commercial management of the airports concerned and that is why, if my hon. Friend the Under-Secretary—I see that my right hon. Friend the Secretary of State is not with us—is not empowered to accept it, we shall seek to divide the House.

Mr. Snape: I am fascinated by the view expressed by the hon. Member for Southend, East (Mr. Taylor) in pleading exemption for his airport. That argument is fairly familiar to me. I went to Exeter—I include the hon. Member for Tiverton (Mr. Maxwell-Hyslop) in this—in November last year to speak at the national conference of the Joint Airports Committee of Local Authorities, and a Conservative councillor from Southend made virtually the same points as the hon. Member for Southend, East, although not as well, but one would not expect that.
That councillor asked what a Labour Government would do about an airport such as Southend, which, as the hon. Gentleman has said, has been virtually privatised by the decision of the local authority. While commiserating with that councillor and the hon. Gentleman on the lack of business acumen of Conservative councillors in Southend, who evidently lost an arm and a leg, as the saying goes, trying to run an airport, I said then, and I say now, that a Labour Government would leave the decision on how its airport was run to Southend council. If it felt that the private sector could better run that airport, that is what local government is about.
We do not fear our political opponents making such decisions, but why should Conservative Back Benchers, no matter how distinguished, make special pleas on behalf of their airports? To use the phrase of the hon. Member for Tiverton, to interpose an expensive company structure on the airport to which he referred applies equally to other parts of the country. I do not see why we should specifically exempt the two airports to which the hon. Members for Southend, East and for Tiverton have referred.
We come back to the central question of principle. One either believes in local government democracy, or one does not, and the Government do not. They do not believe in local democracy even in a fairly Right-wing pro-privatisation council such as Southend. The hon. Member

for Southend, East read out a litany of allegations against the Government's attitude and their interference in decisions taken by a Conservative-controlled council in a town which has, I am sure, been under Conservative control for many years, if not for ever. That is a salutary lesson for the hon. Gentleman. I feel sorry for him. Life would have been easier for him in many ways if the electors of Glasgow, Cathcart had kept faith with him. He would have been Secretary of State for Scotland now. Instead, as the representative of an English constituency, he has to learn that the Government have no faith in the principles of local government democracy. Regardless of the policies pursued by a local authority, the Secretary of State for Transport knows best. He will ensure that Southend and Exeter airports fall within the remit of the Bill, regardless of the wishes of members of his own party in those areas.
The hon. Member for Gedling (Sir P. Holland) is not with us at present. A few years ago he made his reputation, such as it is, by talking about the number of quangos in Britain, how deplorable they all were, and how the Labour Government persisted in adding to their number. I hazard a guess that if the hon. Member for Gedling was still pursuing that political ploy he would be able to compile a list of quangos created and appointed by the Secretary of State that would exceed the number of quangos created by the last Labour Government. It does not suit his political views for the attention of the public to be drawn to such matters at present, but the hon. Gentleman and his hon. Friend are having to learn a bitter and salutary lesson. Their Government have no faith or interest in local government democracy, and that applies to Conservative-controlled councils as much as to Labour-controlled councils.
The Labour party has no fear of local democracy. Under a Labour Government, if Southend council decided to operate its airport in line with the decisions of locally elected councillors, it would do so with our blessing. The Conservative party has spent most of its largely dishonourable history talking about decentralisation. It is a pity that the Government do not put those ideas into practice, instead of insisting on nationalising airports that are run by their political friends—and, as we have just heard, very properly run.

Sir Peter Emery: Exeter airport was in my constituency before the most recent alteration of boundaries moved it into the constituency of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). The airport has been privately managed, and managed very successfully, with the co-operation of Devon county council. The Government have not enabled it to be as much improved as we would have wished, but it has built up a great degree of business. It is establishing a record of service to the south-west, especially in the summer months when international airlines now fly there for the holiday trade.
I can understand the Government's wishes to have powers within the Bill which they could implement if management was not good, or if the operation was unsuccessful or was held by the county and was not working well. However, I would have hoped that the Government would be wise enough to see that where local authorities with airports under their control have put them out to private management, and, as my hon. Friend the


Member for Southend, East (Mr. Taylor) said, really privatised them in form, the powers under the Bill should not be used for those airports.
I hope that the amendment will not be necessary, and that instead we may have an assurance from the Minister that where we have a properly operating commercial organisation running a local airport he will encourage it to continue, without have to use any "draconian" powers to force it to do things which might be unnecessary. I hope that we may have that assurance, because it would be very helpful.

Mr. Stephen Ross: I have great sympathy with these amendments, but, like the hon. Member for West Bromwich, East (Mr. Snape), having been a member of the Select Committee on Transport and having visited Manchester and Birmingham often, as indeed other airports, I have to admit that they are extremely well run. Anyone who has been to Birmingham recently will say that the management of Elmdon airport is of the highest calibre. These organisations are being forced to set up plcs. It is an expensive operation. I have seen what I think was merchant bankers' advice to Manchester. There was a substantial figure involved and their advice was not to do it. Obviously, Manchester will be forced to do it by this Bill.
I ask the Minister to think again about the other amendments—which were not called tonight but which were debated in Committee—putting a limit on the throughput, or on the £1 million or £2 million turnover. I do not know the figure for Southend or for Exeter. I am sure that they are extremely well run. They should not be forced to change their present structure, when they have been run in a way which is considered very satisfactory by both local Members and the councils involved. I hope that one day we shall even manage to do something in the Isle of Wight; we are hoping to get Brymon to join us with one of the planes from Exeter or Plymouth.
I would ask the Minister, when he replies, to give some undertaking to reconsider this and try to introduce amendments in the other place to cover the issue. It is wrong to force these people into this sort of expenditure when they have done a perfectly good job, and are running the airports efficiently, either personally or through subsidiary companies.

Mr. Steen: I agree with the comments of my hon. Friends, particularly in relation to Exeter airport, which I use fairly frequently.
If the Minister feels that he cannot go along with these amendments, what we would like him to say is that a way can be found whereby Exeter and Southend, among others, which are, in effect, already privatised, can become plcs without extra expense. The Government must not encourage further public expenditure on operations that are already privatised. The Government are, quite rightly, very concerned to cut public expenditure. They should not now force more public expenditure on local authorities and airports which are, in effect, already privatised. We want to hear from the Minister tonight that he will find some formula, by the time this Bill gets to another place—

Mr. Ashby: rose—

Mr. Steen: I will give way in a moment. I hope that the Minister will find some formula whereby the extra costs which must be incurred by these two airports, at least, do not fall upon the ratepayers.

Mr. Ashby: Would my hon. Friend not agree that if these local airports were properly privatised, with their equity placed on the market and offered to the public, such expenditure would not fall on the public purse but on the private purse, and all the problems which he envisages would go away?

Mr. Teddy Taylor: Mr. Deputy Speaker—

Mr. Deputy Speaker: Order. The hon. Member must confine himself to one speech. He cannot intervene on an intervention.

Mr. Steen: Before I respond to my hon. Friend, Mr. Deputy Speaker, I am sure that my hon. Friend the Member for Southend, East (Mr. Taylor) can help me.

Mr. Taylor: Does my hon. Friend the Member for Leicestershire. North-West (Mr. Ashby) appreciate that once again his intervention has been inadvertently designed to mislead the House? The Minister made it abundantly clear on Second Reading on 27 January that these companies would continue to be wholly owned by the relevant local authorities. So we are not selling to different shareholders. We will have one shareholder company owned by the ratepayers of Southend. To that extent once again the intervention is mischievous and designed simply to delay the House.

Mr. Steen: Rather than get involved in the dispute between my hon. Friends, I shall sit down because it may be a suitable time to hear what the Minister has to say.

Mr. Tony Lloyd: The Minister may save himself some anxiety because I shall come to his aid by saying how much I endorse the amendment proposed by the hon. Member for Southend, East (Mr. Taylor). Irrespective of whether it has much to commend it in the interests of Southend as an airport, it certainly has a great deal to commend it in regard to Manchester airport. It will not have escaped the Minister's notice that Manchester airport is run by a private company totally at arm's length from the local authority. The local authority made arrangements for the airport to be managed commercially by a suitably qualified and experienced operator who is not an employee of the local authority.
I welcome the amendment and look forward to the hon. Gentleman pressing it to a vote. He would have the support of all hon. Members who have the interests of Manchester at heart because it would take Manchester airport outside the Bill. I have considerable sympathy with what the hon. Gentleman is trying to do, which is to defend the interests of the area which he represents. I endorse that because that is his role in the House. I wish to do the same for the airport in my area. The hon. Gentleman and I are at one in recognising that the effect of the Bill will be totally mischievous. It has little merit for the airports at Southend, Manchester and Exeter.

Mr. Snape: I do not seek to interrupt the able speech of my hon. Friend without good reason. Is he aware that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) has said that the Bill will impose an expensive company structure on Exeter? Does my hon. Friend agree that it will also impose something similar on Manchester and other


airports unless the amendment is accepted because considerable extra corporation tax and value added tax will result as a direct consequence of the airports being included in the Bill? Where is the efficiency there?

Mr. Lloyd: My hon. Friend has made an important point. What makes it even more ludicrous than Conservative Members may realise is that Manchester has already incurred considerable expense because of the Government's action in having driven it to set up its present structure. Despite the fact that Manchester has paid for some of the best—qualified company lawyers in Britain to give advice on the optimal structure to serve the interests of shareholders, the travelling public and the nation, the Government are not satisfied. They have a doctrinaire view of airports policy.
The Government have a particularly peculiar view of a company's relationship with a local authority. They do not accept that an airport run by a company at arm's length from a local authority should have a company structure which is recognisable in any shape or form as being equivalent to a company which ordinary company law establishes. The Government have a warped view of a company. They insist that local democracy is as nought and that the local authority—be it Southend, Exeter or Manchester—is not in a position to make arrangements for its own area and community. Because the Government do not trust local democracy, the owners of Manchester airport, who are the ratepayers in the former Greater Manchester area, will be put to considerable expense.
I endorse the views of the hon. Gentleman in moving this amendment. I only regret that the Government do not wish to recognise that there will be burdens on the smaller airports. The hon. Member for Isle of Wight (Mr. Ross) raised the point in Committee that we should do something for the smaller airports. Because the Government do not accept those arguments and because they will impose these costs on smaller airports and in no circumstances allow a loophole which would operate in the interests of Manchester, I regret to have to say that I suspect that the hon. Gentleman's amendment, ingenious as it is, will get very short shrift from the Minister.

Mr. Michael Spicer: I concede straight away that, as my hon. Friends the Members for Southend, East (Mr. Taylor) and for Tiverton (Mr. Maxwell-Hyslop) have said—and I know that this view is held by my right hon. Friend the Member for Southend, West (Mr. Channon) and by my hon. Friend the Member for Honiton (Sir P. Emery)—British Airports International has done a remarkable job at the two airports referred to. The achievement at Southend is particularly remarkable because a loss-making airport has been turned into a profit-making airport. That is a very successful operation, and I certainly want to associate myself with the tributes that have been paid in this connection.
I am quite sure that Exeter is doing a good job. I have visited the airport and, like the hon. Member for West Bromwich, East (Mr. Snape), I have been impressed by what is happening there. It must be said, however—and I am sure that this will be conceded by my hon. Friends from the west country—that the Exeter airport is still making a loss of about £360,000 out of an annual income of approximately £1 million. My hon. Friend the Member for Tiverton says that it is just under £2 million. His information may be better than mine, but I shall get confirmation of my figures.
My view is that there is still some considerable way to go at Exeter. It is quite remarkable that a city in the heart of one of Britain's great tourist areas should have only a minimal amount of inbound, particularly foreign, tourists coming through its airport.

Mr. Maxwell-Hyslop: One of the reasons is that my hon. Friend refused permission for this. The Spanish tourist company that wanted to put down there before going on to Cardiff was refused permission to do so by him. Therefore, it does not lie in his mouth to criticise the absence of foreign tourists.

Mr. Spicer: My hon. Friend is not living up to his normal standards of fairness in this matter. What he said is perfectly true, but the reason is that the Spanish do not give us comparable rights to pick up people at their airports and take them on to different points. The normal rules under which European traffic is conducted provide that one is not allowed to pick up passengers in another country and carry them on within that country. That is standard practice, even if Exeter thinks that its future lies in breaking those rules. To some extent I would accept that our objective is to get far greater freedom in picking up and putting down passengers within other countries, but that is a long way off. My hon. Friend has not put forward a very strong point there.
It is one thing for me to congratulate the airports on what they have achieved through contracted managment, but my hon. Friends go on to ask why the matter should not be left there. Why do they insist on setting up these companies as public limited companies? The answers are very clear. First, it is only if they are set up as public limited companies that they come under the disciplines of the Companies Acts. Involved here is the Companies Acts accounting system.
11.45 pm
More important is the matter to which my hon. Friend the Member for Southend, East referred—the responsibility of directors. He said, somewhat strangely for him, that he could not see that there would necessarily be any distinction between the objectives of a director operating on behalf of his airport company and the objectives of the local authority. I should have thought there might be many places where the commercial interests of an airport were at variance with the interests of the local authority. For example, in investment, dividend and other policies a distinction might well be made. Under the Companies Acts, the directors of a company have a duty to act in the interests not of the local authorities which are the owners but of the company for which they are responsible.

Mr. Teddy Taylor: As a company director myself, I ask whether there is not an obligation to the shareholders of the company. If the Government are going to set up a company, in which the only shareholder is the Southend council, where is the difference?

Mr. Spicer: The interest ultimately comes back to the shareholders, but a distinction has to be drawn. I am sure my hon. Friend, when he thinks this through, will accept that there may well be cases where the council will wish, for instance, to cream off all the income from the airport, whereas the directors, acting as directors responsible for the well-being of the company and of the shareholders, would wish to retain and reinvest those profits. The hon.


Member for Stretford (Mr. Lloyd) referred to Manchester in this connection. On this point, I do not think there can be a great difference between us. There may well be a conflict of interest between the financial policy of a council and that of a company.
A more substantial point is that one of the unashamed reasons for the Government wanting to set up public limited companies is that we think that that would make it easier—and it would be beneficial for it to be made easier—for those shares to be sold to the private sector. There is nothing in the Bill and it is not our intention to force local authorities to sell shares, although later amendments ask us to do precisely that. Unless the Government are defeated on that issue, they do not intend to compel the sale of shares. However, we shall deal with that matter soon.
We certainly intend to set up structures with shareholdings which will make it easier to sell those companies to the private sector. There is nothing in our proposals that will make contracted management difficult. We think that our proposals will encourage airports to contract management. One of the incentives may well be the ability at some time for the managers of contracted management companies to have a stake in the airports. That could be a great incentive for them. My hon. Friend will be aware that the arrangements at Southend involve management in the airport's finances and future. We certainly see no reason why that should not be extended to shareholding. That would be a good way for a successful management company to be involved in the future of an airport.

Mr. Steen: Does my hon. Friend believe that if Exeter were privatised, as the Bill would have it, instead of losing £300,000, it might make a profit?

Mr. Spicer: I am sure that it was a slip of the tongue which made my hon. Friend talk of privatisation. We are talking not of privatisation at this stage but of a transfer to Companies Acts companies. I envisage Exeter continuing as it is. Through a contracted management team, which knows an awful lot about running airports, the airport's finances will improve, one hopes rapidly and, once it moves into profit, the contracting management may well wish to take a shareholding. That could well be good for Exeter and the airport's future.

Mr. Snape: For the enlightenment of the Minister's colleagues from that part of the world and us, will he say whether he believes that there is something inherently inefficient in how Exeter is run at present and whether something that is being done wrong has made it lose £330,000 in the current year?

Mr. Spicer: That is not for me to say with precision, but I am happy to answer the hon. Gentleman. He might have talked to the managers. I suspect that they would say that Exeter's capability to market itself in, perhaps, foreign countries, exists. I think I am right in saying that an airport that does not receive any direct flights from overseas has some scope in terms of marketing its services.

Sir Peter Emery: Although not on a scheduled service, the airport receives direct flights from Spain by the Spanish national airline. The service has been developed by the present contracting company.

Mr. Spicer: I am grateful to my hon. Friend. I should have said scheduled services. I am trying not to imply criticism. I was asked whether there was any scope for improvement, and my humble opinion is that there probably is.
I am confident that the hon. Member for Stretford was not trying to be helpful when he said that if the two aiports were exempted, we would be making two classes of airport above the £1 million turnover threshold. I shall deal with the argument of the hon. Member for Isle of Wight (Mr. Ross) about raising the threshold shortly. A business with a turnover of £1 million is reasonable. Airports of that size employ an average of 40 people. In the private sector, there is not much problem about a business of that size being subjected to Companies Acts disciplines. We do not think that it is unreasonable to ask such businesses to become Companies Acts companies. Of course, the higher the threshold, the greater the number of anomalies.
Before BAI took over, Southend was open 24 hours a day. The new management has cut the hours of opening from 6 am to 10 pm. The new management has discretion over hours, and that is part of the contract that it has with the local council. I assume my hon. Friend is correct in saying that the local council is the planning authority and that the planning authority would ultimately have the power to impose any night bans.

Mr. Teddy Taylor: My hon. Friend must be aware that Southend airport is in the borough of Rochford.

Mr. Spicer: If that borough is the planning authority, it will have the power to impose night bans. The planning authority has the power to impose whatever restrictions it desires.
There is nothing in the Bill to prevent my right hon. Friend from designating these airports, if he so wishes, to be under the direct control of the Secretary of State. I hasten to add that he has no intention of doing that. He has only designated London airports for that purpose. There is nothing in the Bill that would change the present position in connection with control over night flights.
With that assurance and in view of my answers to the various points that have been raised in this important debate, I hope that my hon. Friend the Member for Southend, East will feel able to withdraw the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 32, Noes 187.

Division No. 129]
[11.56 pm


AYES


Alton, David
Lloyd, Tony (Stretford)


Ashdown, Paddy
Loyden, Edward


Banks, Tony (Newham NW)
Marek, Dr John


Brown, N. (N'c'tle-u-Tyne E)
Morris, Rt Hon A. (W'shawe)


Bruce, Malcolm
Nellist, David


Campbell-Savours, Dale
Parry, Robert


Canavan, Dennis
Patchett, Terry


Craigen, J. M.
Penhaligon, David


Emery, Sir Peter
Pike, Peter


Fisher, Mark
Ross, Stephen (Isle of Wight)


Foster, Derek
Snape, Peter


Foulkes, George
Stott, Roger


Hannam, John
Taylor, Teddy (S'end E)


Howells, Geraint
Wallace, James


Hughes, Robert (Aberdeen N)



Hughes, Simon (Southwark)
Tellers for the Ayes:


Lewis, Terence (Worsley)
Mr. Robin Maxwell-Hyslop and


Litherland, Robert
Mr. Bill Walker.

NOES


Alexander, Richard
Jessel, Toby


Alison, Rt Hon Michael
Jones, Gwilym (Cardiff N)


Amess, David
King, Roger (B'ham N'field)


Ancram, Michael
Knight, Greg (Derby N)


Arnold, Tom
Knight, Dame Jill (Edgbaston)


Ashby, David
Knowles, Michael


Aspinwall, Jack
Knox, David


Atkins, Rt Hon Sir H.
Lamont, Norman


Atkinson, David (B'm'th E)
Lang, Ian


Baker, Nicholas (Dorset N)
Lee, John (Pendle)


Baldry, Tony
Lennox-Boyd, Hon Mark


Batiste, Spencer
Lilley, Peter


Bellingham, Henry
Lloyd, Peter (Fareham)


Best, Keith
Lord, Michael


Bevan, David Gilroy
Lyell, Nicholas


Biffen, Rt Hon John
McCurley, Mrs Anna


Biggs-Davison, Sir John
Macfarlane, Neil


Blackburn, John
Malins, Humfrey


Blaker, Rt Hon Sir Peter
Marland, Paul


Boscawen, Hon Robert
Mates, Michael


Bottomley, Mrs Virginia
Mather, Carol


Bowden, A. (Brighton K'to'n)
Mawhinney, Dr Brian


Bowden, Gerald (Dulwich)
Mayhew, Sir Patrick


Brandon-Bravo, Martin
Merchant, Piers


Brinton, Tim
Meyer, Sir Anthony


Bruinvels, Peter
Miller, Hal (B'grove)


Burt, Alistair
Mills, Iain (Meriden)


Butcher, John
Miscampbell, Norman


Butler, Rt Hon Sir Adam
Mitchell, David (Hants NW)


Carttiss, Michael
Moate, Roger


Cash, William
Morrison, Hon C. (Devizes)


Chope, Christopher
Morrison, Hon P. (Chester)


Clarke, Rt Hon K. (Rushcliffe)
Moynihan, Hon C.


Conway, Derek
Neale, Gerrard


Coombs, Simon
Nelson, Anthony


Cope, John
Neubert, Michael


Couchman, James
Newton, Tony


Currie, Mrs Edwina
Nicholls, Patrick


Dorrell, Stephen
Norris, Steven


Douglas-Hamilton, Lord J.
Oppenheim, Phillip


Dover, Den
Oppenheim, Rt Hon Mrs S.


Dunn, Robert
Page, Richard (Herts SW)


Fairbairn, Nicholas
Patten, Christopher (Bath)


Fallon, Michael
Patten, J. (Oxf W &amp; Abgdn)


Favell, Anthony
Pawsey, James


Fenner, Mrs Peggy
Peacock, Mrs Elizabeth


Fookes, Miss Janet
Pollock, Alexander


Forth, Eric
Portillo, Michael


Fowler, Rt Hon Norman
Powell, William (Corby)


Franks, Cecil
Powley, John


Freeman, Roger
Raffan, Keith


Galley, Roy
Rathbone, Tim


Garel-Jones, Tristan
Rees, Rt Hon Peter (Dover)


Goodlad, Alastair
Rhys Williams, Sir Brandon


Gow, Ian
Ridley, Rt Hon Nicholas


Gower, Sir Raymond
Robinson, Mark (N'port W)


Greenway, Harry
Roe, Mrs Marion


Gregory, Conal
Rumbold, Mrs Angela


Griffiths, Peter (Portsm'th N)
Ryder, Richard


Ground, Patrick
Sackville, Hon Thomas


Gummer, Rt Hon John S
Sainsbury, Hon Timothy


Hamilton, Hon A. (Epsom)
Shaw, Giles (Pudsey)


Hamilton, Neil (Tatton)
Shaw, Sir Michael (Scarb')


Hampson, Dr Keith
Shepherd, Colin (Hereford)


Hanley, Jeremy
Sims, Roger


Hargreaves, Kenneth
Smith, Tim (Beaconsfield)


Harris, David
Soames, Hon Nicholas


Hayes, J.
Speed, Keith


Heathcoat-Amory, David
Spencer, Derek


Heddle, John
Spicer, Jim (Dorset W)


Hickmet, Richard
Spicer, Michael (S Worcs)


Hicks, Robert
Squire, Robin


Hind, Kenneth
Stanbrook, Ivor


Holt, Richard
Stanley, Rt Hon John


Howard, Michael
Stern, Michael


Howarth, Gerald (Cannock)
Stevens, Lewis (Nuneaton)


Howell, Ralph (Norfolk, N)
Stewart, Allan (Eastwood)


Hubbard-Miles, Peter
Stewart, Andrew (Sherwood)


Jenkin, Rt Hon Patrick
Stradling Thomas, Sir John





Sumberg, David
Wall, Sir Patrick


Taylor, John (Solihull)
Waller, Gary


Tebbit, Rt Hon Norman
Wardle, C. (Bexhill)


Terlezki, Stefan
Watts, John


Thompson, Donald (Calder V)
Wells, Sir John (Maidstone)


Thompson, Patrick (N'ich N)
Whitney, Raymond


Thorne, Neil (Ilford S)
Wiggin, Jerry


Thornton, Malcolm
Wilkinson, John


Thurnham, Peter
Wolfson, Mark


Townsend, Cyril D. (B'heath)
Wood, Timothy


Tracey, Richard
Yeo, Tim


Trotter, Neville
Younger, Rt Hon George


Twinn, Dr Ian



van Straubenzee, Sir W.
Tellers for the Noes:


Waddington, David
Mr. Francis Maude and


Wakeham, Rt Hon John
Mr. Gerald Malone.


Walden, George

Question accordingly negatived.

Clause 14

TRANSFER SCHEMES

Mr. Ashby: I beg to move amendment No. 71, in page 11, line 20, after 'providing', insert '(a)'.

Mr. Deputy Speaker: With this we may take the following amendments:
No. 72, in page 11, line 23, at end insert—
'(b) for the placement on offer to the public of not less than two-thirds of the equity of the company.'.
No. 73, in page 11, line 29, at end insert
and to any employees' share scheme as defined in section 19(6).'.

Mr. Ashby: The effect of the amendments is to force municipal authorities that are the owners of the airport plcs to provide within the scheme for the Secretary of State to offer to the public not less than two thirds of the equity of the company. Within the scheme there should be included an employees' share scheme as defined in clause 19(6).
There is a provision in part II of the Bill which has been described as having the effect of privatising municipal airports, but it will do nothing of the sort. It will merely make the companies subsidiaries of the councils. They will be quasi quangos and they will be 100 per cent. owned by the councils. Many of the councils are of a political nature which is such that they will never give up one share or ever introduce any private capital into the airports.
I heard the speech of my hon. Friend the Member for Southend, East (Mr. Taylor), and I praise the Southend council. It must be a sheer delight to have a council which has reduced rates and is running its affairs as well as has been described by my hon. Friend. However, councils throughout the country, left, right and centre, are not doing what they are supposed to be doing, which is providing services. They are straying more and more into areas to which they are not suited. If an airport company is well run, it is wrong that it should be a subsidiary of the council and part of the services of the council. That is not what a council is supposed to do. The airport company should be floated and should go properly into the private sector, which is what my amendments propose.
Unlike Southend, I suffer in Leicestershire from a hung county council where the Conservatives wanted to put up rates by 10 per cent. but the Liberals combined with Labour to put them up by 31 per cent. I suffer from a hung district council within which is the East Midlands airport, where the Conservatives wanted to put the rates up by a


modest 9 per cent. and the Liberals combined with Labour to put them up by 28 per cent. I applaud the Southend council, but my hon. Friend the Member for Southend, East must realise that not all councils are run like the Southend council. The Bill has to make provision for everyone if it is not to be a hybrid Bill, which is why I propose my amendments.
On Second Reading the Secretary of State set out the objectives for privatising the British Airports Authority. He said:
It is high time that we changed the regime under which it operates to liberate management from the constraints of public ownership. Our objective must be to remove the burden of political interference and state control so that airports, airlines and their customers can reap the benefits.
I fail to understand why there should be one rule for the BAA and another for the municipally run airports. In the public's eye, there is little difference between a Government-run airport and municipally-owned airport. If those are the reasons for privatising BAA, how much more must those reasons prevail in the case of most of the municipal airports?
Many of the municipal airports are run by local authorities which are Labour controlled and will perhaps remain Labour controlled for some time. The Labour party is a byword for "political interference" in commercial decisions. What hopes are there of no "political interference" in the running of the airports under a Labour-controlled council? The phrase
to liberate management from the constraints of public ownership
has little meaning when we look at Labour-controlled councils up and down the country. We never see a liberated management. We see control after control.
Therefore, the Bill as drafted gives very little hope for the plcs and airports. They will not have liberated management or be free from political control. Most airports will be run in much the same way as they have been hitherto. I can see no logical or coherent reason why those airports should not be privatised.
12.15 am
On Second Reading, the Secretary of State said:
The Bill also ensures that there is a proper ars's length relationship between the new airport companies and their parent authorities".
As I know that Hansard is always totally correct, I must assume that that is a proper reflection of what the Minister feels about that part of the Bill. I agree with him that there is
a proper ars's length relationship between the new airport companies and their parent authorities".—[Official Report, 27 January 1986; Vol. 90, c. 691–5.]
Frankly, that reflects the way that I feel about the Bill. That was no Freudian slip. Truth will out in the end.
Let us consider the many measures that have been taken. The local authorities are always servants of Government and subject to the law. The Government have done a great deal, rightly, to control local authorities. They have attempted to control some of their most profligate expenditure. In council housing, legislation has forced local authorities to sell local authority housing—

Mr. Deputy Speaker: Order. The hon. Gentleman must relate what he is saying to the amendment.

Mr. Ashby: With great respect, I am referring to the sale of a council's shares to the public.

Mr. Deputy Speaker: The hon. Gentleman is referring to the sale of council houses, as far as I can hear.

Mr. Ashby: With respect, I am relating the sale of council shares to, and comparing it with, the Government's legislation that has ordered local authorities to sell houses. Obviously, I expressed myself very badly. I shall start again.
If there is any complaint that my amendment forces local authorities to sell property that is theirs, one has only to look at housing legislation to see that there are precedents for that. The Government have forced local authorities to sell houses to those who live in them. There are many precedents. My amendment provides for an employees' scheme, which is almost exactly the same as the sale of council houses.

Mr. Robert Hughes: If I follow the hon. Gentleman's analogy correctly, is he arguing that the people who work at the airports should be sold the airports at discount prices?

Mr. Ashby: Employees at an airport should be part of any such scheme. There is provision for it in clause 19(6) of the Bill. I am merely asking that any sale of the shares should embrace clause 19(6). It is already in the Bill. I am asking for nothing more than is in the Bill. There is plenty of precedent for such sales. The inclusion of an employees' scheme is almost exactly as provided in the sale of council housing.
I refer to my authority, the East Midlands airport authority. In north-west Leicestershire, we have East Midlands airport owned by Derbyshire, Nottinghamshire and Leicestershire county councils—not in equal shares. It is largely owned by Nottinghamshire and Derbyshire. Leicestershire owns only a few shares. The benefit for Leicestershire is that it gets the rates from the airport.
The East Midlands airport makes a profit of about £2 million, but what happens to that money? Most of it goes to Derbyshire or Nottinghamshire and little stays in northwest Leicestershire. It appears that Nottinghamshire county council has spent £20,000 on CND and £600,000 on revamping the market square—it is a fine market square and I do not see the need for the work. That is an absolute disgrace. It is also spending £120,000 on modernising the already fine council offices. They are examples of the recent profligacy of the Nottinghamshire county council.
Where does Derbyshire's share of the £2 million go? It has taken on 700 new staff. It has spent £50,000 on recalling the school stationery to overprint on it "Derbyshire supports a nuclear free zone". It has circulated a free newspaper, a party political paper, called Insight. That is where the money is going.
Those councils pay lip service to the airport and they are creaming off the profits and using them to offset their profligate spending. There are no benefits for the people living in the area.
The councils will argue that there has been some capital investment, but it is always too little too late. The airport is in the centre of a road network—just off the M1 and close to the M6. It is in the centre of England and is ideally placed to be a cargo airport. It is a successful airport, but it could be more successful. It needs a dynamic approach. A plc with a number of councils as shareholders and directors will not do much good.
What sort of people will be the directors of the company? Largely they will come from the Derbyshire and Nottinghamshire county councils. They will be social workers who have never run a business in their lives and who do not have a clue how to do so. It is wonderful to be a bus driver, but one has to know something to be a director.

Mr. Snape: I notice from one of the reference books that the hon. Gentleman is a company director. Perhaps he could tell us what qualities he possesses which make him more suitable to be a company director than, for example, a bus driver or a social worker?

Mr. Ashby: My qualification is that I have some experience of running a business.
The directors of the plc must have experience of running a business. We are told that some of the existing directors of the airport will be on the board, but there will be others representing the owners, the shareholders. They have control, but they have no business experience. The present chairman of the joint airports authority is a very nice man with "love" and "hate" written on the knuckles of each hand. I often wonder what the airport director feels when he sees those words when decisions are being taken. We must have people with business acumen and experience.

Mr. Deputy Speaker: Order. I am having great difficulty in relating what the hon. Gentleman is saying to the amendments. We are discussing not the principles of the Bill but the amendments.

Mr. Ashby: If the shares are offered to the public, the directors will reflect the ownership of the shares. In the natural course of events, like any public limited company, one would expect to see directors with a wide range of business experience: people who have put money into the company. That is why I say that the sort of people who will be on the board will be people with that business experience. That is what the airports will require. They will require the business experience which they do not have at the moment. Being run as a service at the moment is doing them a disservice because they are not able to achieve their full management or investment potential. There are great limitations on the investment which they can get unless they are prepared to go out for private investment. Unless they are prepared to do that, they will have no future.
As the airports are set up at the moment, there is little hope for them. We see no change, just disadvantage. We simply have to make those local authorities part with their shares to the general public to be able to free the airports from their constraints, otherwise we are wasting our time.

Mr. Tony Favell: I rise to support my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby). I have been consistent from the time that the Bill was first published and debated within the Department in suggesting that the municipal airports should be released from the dead hand of the local authorities.
The Bill is a great missed opportunity for the municipal airports. Its main thrust has my heartfelt support. One of the Government's great achievements has been their privatisation programme. That will go down in history. The privatisation of the BAA will go down as an enormous success. But success for the BAA will mean dismal failure for the municipal airports which are being put at an enormous disadvantage as a result of the Bill.
Stansted, Gatwick and Heathrow, in the hands of Sir Norman Payne and his gang will be an enormous success. They are all good business men who know what they are doing. The running of an airport is big business. It is not like running a bus station or even a small railway station. It needs to be run by people who know the business intimately and know what they are doing.

Mr. Stephen Ross: Will the hon. Gentleman give way?

Hon. Members: Oh no.

Mr. Ross: Yes, because it is about time somebody stood up for local government. What is wrong with the present management of Manchester or Birmingham or Newcastle airports? Answer that.

Mr. Favell: They are run as good municipal airports at the moment. They are run for the benefit of the local people. But the people who run them do not have the expertise to run airports as big business and to attract business from elsewhere in the country.
Let us take the example of Atlanta in the United States. That has a population of about 1 million, yet the airport sees 12, 13 or 14 times as many people go through that airport each year because it is run as a business. The people who run it bring prosperity, people and jobs to the area. For Manchester, the Bill is a great lost opportunity. Enormous employment opportunities could be brought to Manchester airport if only it was run as a business, not merely as a municipal facility.
There are other disadvantages in the Bill for the municipal airports. For example, being turned into plcs, they will now have to pay corporation tax. That will be an enormous disadvantage. They are being put at great disadvantage as against the BAA airports. It is a tragedy. If there was any chance of Ken Livingstone running Heathrow, Gatwick or Stansted, all hell would be let loose. There would be no question of the GLC or its successors running the three main airports of the southeast. It is a tragedy that Manchester and other municipal airports should be put in the hands of Left-wing authorities such as Manchester city council. We shall live to rue the day. We are giving the south-east an advantage over the regions. I support my hon. Friend's amendment.

Mr. Michael Spicer: The Government sympathise very much with what my hon. Friends are saying. In particular the Government agree about the desirability of privatisation. We have already made that clear. Clause 24 makes it clear that the local authorities, when they sell their shares in airports, cannot impose within the memorandum and articles of association restrictions on who may buy the shares. One of the aspects of the original Manchester scheme with which we were not happy was the fact that it seemed to restrict the sale of shares to the public sector. We agree, therefore, about the objective.
I am not as pessimistic as my hon. Friends about the possibility of even Labour councils eventually seeing some of the benefits of privatisation. The development of the airport would be outside public sector controls. There could be employee participation in shareholding. It would be possible to attract capital and turn loss-making airports into profit-making ones, and to use the moneys currently used to subsidise airports—10 out of 16 make losses at


the moment—for better social purposes. Even Labour councils may eventually see the advantages of either partial or total sale of shares in their airports.
My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) asked why there should be one rule for the BAA and another rule for municipal owners. The answer is that the Government own the BAA and therefore have the right to sell the airports. Depending on one's view about local authority independence, one may or may not take the view that one should compel local authorities to act against their will. I concede that that is a matter for debate among my hon. Friends. However, giving people the right to buy the houses they live in is a different matter from compelling airport owners to sell their assets when, for instance, there may not be a ready buyer. That may well be the case with the 10 airports that are making a loss. For those reasons, I would—

Mr. Ashby: I thought that I had covered that. It would be part of the scheme, would it not? If the airport was a loss-maker, that would be part of the scheme, and there would have to be provision perhaps for the sale of the shares in two or three years' time on a given scale, when one could see the way in which things were going.

Mr. Spicer: My hon. Friend must at least concede that he made a direct comparison with the sale of council houses and that, in that case, it is a question of the right to buy. There is implicit in that system a buyer. Such a buyer is not implicit in the compulsory sale provisions that he wishes to introduce. So because we have taken the view that we cannot, to this extent, interfere with the independence and autonomy of local authorities—and that is a pretty fundamental decision that we have had to take—we could not, therefore, go along with these amendments, which are aimed precisely at compelling local authorities to sell.
Having said all that, however, I must repeat to the House and to my hon. Friends that it is, of course, our objective—and it is one of the reasons for setting these companies up as public limited companies—that a very large proportion of the shares should be owned by the private sector.
I hope, therefore, that on the basis of what I have said my hon. Friend will feel able to withdraw his amendment.

Mr. Ashby: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16

CONTROL OVER CONSTITUTION AND ACTIVITIES OF PUBLIC AIRPORT COMPANIES

Mr. Michael Spicer: I beg to move amendment No. 10, in page 13, line 14 after '(1)', insert 'Subject to subsection (1A),'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 11 and 12.

Mr. Spicer: Because these are simple amendments, perhaps I can address myself briefly to amendments Nos. 11 and 12, which are the substantive ones.
The purpose of amendment No. 11 is to ensure that the minimum number of directors who are employees and are

to be appointed to the board of a public airport company under subsection (1) are suitably experienced in airport management. The whole purpose of the subsection is to ensure that airport company boards contain a minimum element of practical airport experience. It would be in the interests of neither the company, the employees nor the ratepayers if this important objective were to be frustrated by the appointment of employees who lacked experience of airport management. I hope that the House will be able to accept the amendment.
Amendment No. 12 is a rather different proposition. In Committee, in response to an amendment proposed by my hon. Friend the Member for Tayside, North (Mr. Walker) I undertook to look again at the provision in subsection (1) for a minimum number of public airport company directors to be drawn from full-time employees. My hon. Friend pinpointed the problem, which is that a local authority which had contracted out the management of its airport—the issue which we have just debated, and I should perhaps have said earlier that we wanted to make to this concession those who had contracted-out management—would be unlikely to have sufficient qualified employees within the public airport company to satisfy the requirement in the subsection that three, or one quarter of the directors should be full-time employees.
We have considered the problem carefully and we believe that it can be tackled by providing that if the Secretary of State is satisfied that appropriate arrangements for the management of the airport have been made, he may direct that an exemption from the provision of subsection (1) be granted to the controlling authority concerned. That is precisely in response to the point raised by my hon. Friend in Committee, and what this amendment aims to do.

Amendment agreed to.

Amendments made: No. 11, in page 13, line 18 at end insert
'who are suitably qualified to act as directors of the company by virtue of their experience in airport management'.
No. 12, in line 18 at end insert—
' (1A) Where at any time it appears to the Secretary of State—

(a) that a public airport company has made arrangements for the management of the airport operated by it to be carried on otherwise than through its officers or employees and
(b) that any such arrangements are adequate to secure that those participating in the management of the airport under the arrangements are suitably qualified to do so by virtue of their experience in airport management,

the Secretary of State may direct that subsection (1) shall not apply in relation to that company.
(1B) Any direction given by the Secretary of State under subsection (1A) may provide—

(a) that it is to have effect only for such period, or in such circumstances, as may be specified in it, or
(b) that its continuation in force is to be subject to compliance with such conditions specified in it as the Secretary of State thinks fit.'.—[Mr. Michael Spicer.]

Clause 17

DISABILITIES OF DIRECTORS OF PUBLIC AIRPORT COMPANIES

Mr. Snape: I beg to move amendment No. 13, in page 14, leave out lines 13 and 14.
The effect of the amendment would be to limit the constraints imposed on directors under subsection (2) to


abandoning their participation in discussions on contracts between the company or a subsidiary and the council and voting on any such contract. In response to a similar amendment that we moved in Committee the Under-Secretary of State for Scotland said that the Bill
will allow members of principal councils, who are also airport directors, to take part in the consideration of matters relating to their airports, other than matters of contracts or proposed contracts between the airport company and the council. This was done deliberately to allow the maximum informed discussion on airport matters."—[Official Report, Standing Committee J, 6 March 1986; c. 411.]
He later said that the Government would consider whether they could move some way in the direction suggested by the amendment. The Minister implied that the part of the clause which the amendment would delete applied only to subsection (2)(b). Confirmation is required from the Under-Secretary.
There are similarities between what the Government seek to do in this Bill and the Transport Act 1985, which requires the establishment of operating companies for the provision of bus services and places similar constraints to those in this Bill on the ability of elected councillors who are directors of the operating company to discuss and to vote at council meetings on matters related to the company. The Transport Act includes a section which enables the Secretary of State for Transport to issue a dispensation from those constraints. The Under-Secretary replied in Committee to an amendment designed to insert a similar clause in the Bill.

Sir Peter Blaker: I intervene briefly to seek clarification of the effect of the clause as it stands, because of my interest in Blackpool airport, which has not been mentioned today. Like many other holiday resorts, Blackpool has an airport. Historically, holiday resorts have provided the infrastructure for their regions for the benefit of tourism and more recently for conference business. This goes back to the last century, and is not confined to airports.
Sometimes, the airports run at a deficit. Blackpool airport runs at a loss, although this year the loss is very small. We hope to move more regularly into profit in future if the exploration for further gas resources and oil in the Irish sea is successful.
The consequence of Blackpool running its own airport in the circumstances and for the purposes that I have described is that it is frequently discussed by Blackpool borough council. It is not irrelevant either that the airport provides more than 300 jobs. Therefore, it is important to Blackpool council and to the airport to know exactly the effect of the clause. As I understand it, while the clause means that a councillor who is also a director of the airport may not take part in discussions on a proposed contract between the council and the independent airport, and may not vote on a question involving a contract, he may take part in discussions which involve other airports matters; for example, airport policy, which is discussed frequently by Blackpool council.
This is an important question, not only on its own merits, but especially because of the point made by my hon. Friend the Member for Southend, East (Mr. Taylor) when he referred to what the Secretary of State said on the Second Reading about the duty of directors lying principally to the company and not necessarily to the

council, if they are councillors. I should be grateful if my hon. Friend would confirm that my understanding of the clause is correct.

Mr. Ancram: It might be helpful to my right hon. Friend the Member for Blackpool, South (Sir P. Blaker) if I briefly restate the purpose of the clause, although his reading of it was very accurate.
The purpose of clause 17 is to safeguard the highest standards of probity in the conduct of public business as it relates to public airport companies. Clause 17(2) is concerned with maintaining those standards at meetings of councils when the affairs of airport companies are under discussion.
Like the Transport Act—the hon. Member for West Bromwich, East (Mr. Snape) is correct in saying that there are some similarities—the clause prohibits councillors who are also directors of associated public airport companies from voting when matters of contract between their council and their company are under discussion. Like the Transport Act, it prohibits their taking part in discussion on any such contracts, but, unlike the Transport Act—and my right hon. Friend the Member for Blackpool, South made this distinction—it allows them freedom to take part in discussion and consideration of matters other than matters of contract—indeed, the sort of matters to which he was referring. This was a deliberate change to allow the maximum informed discussion on airport matters. I hope that that will satisfy my right hon. Friend's constituents.
I have to say to the hon. Member for West Bromwich, East that I think that we have gone far enough. I do not think that we should remove the prohibition on councillors, who are also directors, voting on airport matters other than contracts. apprciate that I undertook in Committee that the Government would consider whether we could move towards providing a path for the Secretary of State to issue exemptions from the provisions of clause 17(2). We gave very careful consideration to that matter. Having listened carefully to the arguments in Committee and to the arguments put forward by the hon. Gentleman tonight, I do not think, on balance, that the potential benefits outweigh the dangers of enhanced liability to conflicts of interest. It is for that reason that we do not propose to amend the clause.
Like the hon. Gentleman, I re-read the debate in Committee. It appears to me that the misunderstanding that may have given rise to the debate in the Committee was that there was no distinction between this Bill and the Transport Act. I hope that tonight I have at least cleared that up. In the light of what I have said, I hope that the hon. Gentleman will withdraw the amendment.

Mr. Snape: The Department of Transport's circular 4/1985, which deals with these matters, says:
Members wishing in exceptional circumstances to vote on any matter or to speak on a matter excluded from the dispensation … may apply to the Secretary of State".
What is the difference between the two pieces of legislation so far as this dispensation is concerned? Why is it regarded as permissible under the Transport Act 1985, but as something perhaps dangerous—if that is the right word—under this Bill?

Mr. Ancram: I do not want to rehearse the arguments that we had in the Committee on this subject. I think it was


a matter of agreement between the two sides in Committee that this is an area in which probity is very important. The Transport Act was rather stricter in these terms than this Bill. It was felt that in terms of the management of airports councillors who were directors should be allowed to take part in discussions relating to airports, but where voting is concerned—and obviously voting has some implications in itself—the restrictions should be made.

Mr. Snape: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20

LOCAL AUTHORITY FINANCIAL CONTROLS IN ENGLAND AND WALES

Mr. Snape: I beg to move amendment No. 14, in page 16, line 19, after 'company', insert 'formed under section 12'.

Mr. Deputy Speaker: With this we may take the following amendments:
No. 15, in page 16, line 22, after 'of', insert 'such'.
No. 16, in page 16, line 27, after 'company', insert 'formed under section 12'.
No. 17, in page 16, line 29, after 'of', insert 'such'.
No. 18, in page 17, line 3, at end insert—
'(3A) Where any public airport company is not formed under section 12, then, for the purposes of Part VIII of that Act—

(a) any amount—

(i) being an advance of capital nature made to the company or a subsidiary of subsidiary of the company by the controlling authority of that company, or
(ii) raised by the issue of any securities by the company or a subsidiary of the company to the controlling authority of that company,

shall be treated as prescribed expenditure of the controlling authority of that company, and
(b) any amount repaid by the company or a subsidiary of the company in respect of any such advance as is mentioned in paragraph (a)(i) shall be treated as a capital receipt of the controlling authority of that company in accordance with subsection (2), but
(c) no expenditure incurred or amount received by the authority for the purposes of or in connection with the company other than such expenditure or receipts as are mentioned in paragraphs (a) and (b) shall be treated as prescribed expenditure or capital receipts of the authority;

Provided that such a public airport company shall not borrow or raise any amounts other than as mentioned in paragraph (a) without the consent of the Secretary of State who shall exercise the power of giving consent to any borrowing in the national interest.'.

Mr. Snape: The purpose of this amendment and those associated with it is threefold. First, it is to preserve the local authority's right to form proper independent companies. This would overcome what we consider to be the ludicrous argument that a company is independent only when shares are vested in the private sector. We believe that the private sector's willingness to invest in any trading undertaking is dependent upon the viability and status of that undertaking and not on who owns the shares. We can give as an example the success of private involvement in Manchester airport plc.
The second purpose of the amendments is to free such independent companies from the constraints of local

authority capital expenditure controls. We believe it is nonsense that an independent company should compete for borrowing power approvals with highway authorities, for example, up and down the country. Building terminals at airports surely should not be equated with maintaining roads. The existing funding arrangements for airports in fact acknowledge this point.
Thirdly, we recognise that the Secretary of State will not wish to give up some control over the activities of independent companies. That is the sentiment behind this Bill, as it is behind other privatisation measures that the Government have introduced. These amendments are designed to provide for advances made to an independent company other than by a local authority. We accept that as prescribed expenditure. The Secretary of State should be asked for his consent to such expenditure. He could exercise his power to consent to such borrowings in the national interest in exactly the same way as is provided for in clause 9(1) in connection with the BAA holding company when it is wholly owned by the Government. We believe that such an approach would have the virtue of consistency and would go a long way to meet the criticism that the Secretary of State is being less than even-handed in his approach to local authority airports compared with his approach to those airports owned by the British Airports Authority.

Sir Peter Blaker: I have a relatively brief point of clarification. This clause tightens up the rules relating to what will be treated as prescribed capital expenditure by a local authority when it comes to capital expenditure for its airport. Again, this is relevant to Blackpool airport. I would like from the Minister an assurance that the airport pool will still be available for the local authorities for the purposes of borrowing for capital spending. I am thinking particularly of smaller local authorities such as Blackpool. Will the Government also give an assurance that they will do what they can to ensure that the airport needs of the smaller local authorities, such as Blackpool, are born in mind when the borrowing requirements are being discussed. I have it in mind that Blackpool airport will need soon to spend a large sum on renewing the runway, if it is to remain effective.

Mr. Ridley: The hon. Member for West Bromwich, East (Mr. Snape) moved his group of amendments, the main purpose of which is to allow public airport companies not set up under clause 12 to obtain private capital without that finance counting against the controlling authority's capital allocation. I point out that there is only one such public airport company—Manchester. I do not know why this series of benefits should be extended to Manchester rather than to any other local authority. I do not really need to know why. The reason may be obvious. We hope all our airport companies will look to the private sector to help finance investment, but so long as those companies are subject to local authority control capital finance from any external source, whether from the authority itself or from private sources, counts against the public sector borrowing requirement. This is not because the company may or may not be viable. It is because local authorities enjoy the same credit-worthiness as the Government because of their taxing powers. An investor in an airport company and an authority controlling an airport company will know that the authority stands behind it and guarantees it, as it were, in the same way as the


Government stand behind public corporations. Therefore, the clause provides that private capital counts against the controlling authority's capital allocation in the same way as any loan that it might make to the company. There is no difference between the local authority borrowing and the company borrowing because, ultimately, the local authority stands behind both.

Mr. Shape: What is the difference between a plc such as that set up to run Manchester airport and the BAA holding company which, at least initially, is wholly owned by the Government and will presumably be outwith the public sector borrowing requirement? Is the right hon. Gentleman saying that the BAA holding company will still be part of the PSBR for financial purposes?

Mr. Ridley: As long as the BAA holding company is in the public sector, it will be part of the PSBR and any borrowing that it undertakes will count against public expenditure. The same applies to any local authority airport company or bus company. As long as the authority holds 51 per cent. or more of the company, its investment will count towards the PSBR. If the company went bust and lost all of the money that had been lent to it, the Government, in the case of the BAA, or the local authority would have to pay off the debt.
The amendment acknowledges that there should be a borrowing consent system. That involves no significant change in the way the system will be now operated. The necessary capital allocations will be given when we judge such loans to be in the national interest and an affordable charge on the PSBR. An authority can enable a company to escape the control on local authority capital expenditure by removing the need—by transferring control to the private sector.
If Blackpool airport has to make investments and the council applies in the normal way for investment control, the projects of national or regional importance system will apply. We have very nearly always authorised airport investment under the PONORI system, and we always will, provided that it appears to be viable and is within what the public sector can afford. It is not an area where there have been complaints of the Government holding back consents.
Amendment No. 14 would also enable controlling authorities to incur capital expenditure in connection with airport companies not set up under clause 12 without that expenditure counting against their capital expenditure allocations. As such, it represents a widening of the scope of an amendment that the hon. Member for West Bromwich, East moved in Committee to enable companies to borrow from the private sector for capital expenditure associated with the setting up of the company without that expenditure counting against allocations. It was withdrawn because the hon. Gentleman recognised its narrowness and failed to give any examples of such capital expenditure. He has made it wider this time, but I see no reason why, if an authority chooses to incur capital expenditure in connection with an airport company, it should receive special treatment.
We have already made a concession to enable the internally generated funds of airport companies to be reinvested outwith the controls. The amendment would go further and abolish those capital controls. That would be going too far, and I cannot advise the House to accept the hon. Gentleman's amendment.

Amendment negatived.

Clause 27

DIRECTIONS TO AIRPORT OPERATORS IN THE INTERESTS OF NATIONAL SECURITY ETC.

Mr. Steen: I beg to move, amendment No. 21, in page 19, line 36, leave out from 'security' to end of line 38.

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to consider the following: Government amendment No. 22.
Amendment No. 23, in page 20, line 2, leave out 'copy' and insert 'draft'.
Amendment No. 24, in page 20, line 2, after 'direction', insert 'proposed to be'.
Amendment No. 25, in page 20, line 30, at end add—
'(8) A direction under this section shall not be given unless a draft of the direction has been approved by a resolution of each House of Parliament.'.

1 am

Mr. Steen: At this time of night I am sure that most hon. Members would like me to make a short but pithy speech on the remaining amendments in my name and in the names of my hon. Friends. However, it would be less than appropriate at this time of night to skirt over important amendments that could affect the history of the aviation industry.
Amendment No. 21 would leave out the proposed power of the Secretary of State to give particular, as distinct from general, directions to an airport operator requiring him to do or not to do a specific thing or to discharge, or facilitate the discharge of, an international obligation of the United Kingdom. The amendment would leave untouched the proposed power for the Secretary of State to give general or particular directions to airport operators in the interests of national security under subsection (1) and (2).
The amendment seeks to limit the Secretary of State's enormous powers under clause 27. If one examines the whole of the Bill, it is evident that there is little that the Secretary of State cannot do in connection with airports or the aviation industry. He has enormous powers and the amendment seeks to ensure that, in connection with matters of national security, the Secretary of State has general and particular powers but where national security is not at issue, he should not have such enormously wide, unfettered powers.
If the Bill had been introduced by the Opposition, one would expect them to be seeking more centralised power for the Secretary of State. It is, therefore, not appropriate for Conservative Members to introduce a Bill that gives such enormous powers to a Secretary of State of this or a future Government. The amendment suggests that the Secretary of State's powers should be clipped and he should not have powers of a particular nature but of a general nature.
The provision that the amendment would remove probably serves no purpose, as the Secretary of State can achieve the same result under existing legislation. He has power under section 6 (2) of the Civil Aviation Act 1982 to give the Civil Aviation Authority a direction to insert in an aerodrome licence a condition that the holder will not perform specified actions in the interests of discharging the international obligations of the United Kingdom. Section 6 (2) of the Civil Aviation Act 1982 states:
The Secretary of State may, after consultation with the CAA, give it directions to do a particular thing which it has


power to do or refrain from doing a particular thing, if the Secretary of State considers it appropriate to give such directions.
It is difficult to know what the Government have in mind. They may be contemplating the abolition of aerodrome licences and perhaps that is what the Secretary of State is intending. Does he intend to do that and restrict matters of safety? [Interruption]. Mr. Deputy Speaker, I wonder whether you heard a noise in the Chamber? Perhaps it was simply my faulty hearing.
As I was saying before I was disturbed, I am not sure what the Government intend to do. The Minister must tell us why he is introducing a clause that gives the Secretary of State not only particular powers but general powers in relation to national security and all other matters. The purpose of the amendment is to tease out of the Government information on why they insist on such wide powers. If the Government's true purpose could be extracted from the Under-Secretary of State, the amendment could be treated as a probing amendment.
The related amendments to clause 27 require the Secretary of State to lay a draft of his proposed direction, whether it be general or specific, before each House of Parliament and to obtain approval for the draft by a resolution of each House. The requirement of an affirmative resolution would ensure that the direction could be debated in Parliament. The enthusiasm with which that suggestion has been greeted by my hon. Friends shows that they would wish for an affirmative resolution procedure to ensure that the House debated the matter properly.
I shall not detain the House any further on this complicated, technical point, which I see that my hon. Friends have grasped. There seems to be no point in the Secretary of State having those powers, except in cases of national security. However, national security is already enshrined in the 1982 Act. Why does the Secretary of State want those wide powers? What does he have in mind? I rest my case there.

Mr. Deputy Speaker: Mr. James Couchman.

Mr. Nicholas Soames: Briefly!

Mr. Couchman: I shall take note of the strictures of my hon. Friend the Member for Crawley (Mr. Soames) to be brief. I shall be much briefer than my hon. Friend the Member for South Hams (Mr. Steen).
The Secretary of State is taking considerable powers under clause 22, and Government amendment No. 22 takes him further down that road. The effect of amendment No. 22 is to put beyond doubt the fact that a direction to give effect to an international agreement would override the provision on economic regulation contained in part IV. That makes it even more imperative that the Secretary of State should take a discretionary power, written into statute, to pay compensation if such a direction meant that an airport would sustain a substantial loss.
Under part IV, a comprehensive regulatory structure will be created to control airline charges at the major airports. In making their investment decisions, investors will be substantially influenced by the terms of the permit, especially the terms relating to price. Once they have made their decision, they are at risk that the Government will enter into a new international agreement or obligation or reinterpret an existing obligation in a way that would lead

to losses. That causes considerable concern to those who might invest in airports. Such a direction could undermine a regulatory regime and lead to significant losses for investors.
I draw the attention of my hon. Friend the Under-Secretary of State to that matter and ask him whether he believes that there should be a discretionary power—no more than that—to pay compensation if such a direction led to such losses.

Mr. Michael Spicer: I am advised that amendment No. 21 would seriously impair the Government's ability to meet their international obligations. A direction to the CAA under section 6 of the 1982 Act might allow the Secretary of State to include a condition in a licence in connection with an international obligation, but I am advised that we could not force the airport operator to comply. We feel that the subsection dealing with international obligations that my hon. Friend the Member for South Hams (Mr. Steen) would wish to delete is important. We have little doubt that failure to meet a treaty obligation could result in reciprocal action being taken against United Kingdom interests in the international forum. I am sure that that is not what my hon. Friend intends. I hope, therefore, that he will not press the amendment.
My hon. Friend the Member for Gillingham (Mr. Couchman) asked whether there would be any compensation arrangements following a direction. We discussed this matter in Committee. We would not envisage any compensation arrangements being made. The owners of international airports benefit considerably from the internationalism of their airports. That is one of the factors that will have to be taken into account, certainly in the prospectus, when BAA airports are sold.
Amendment No. 22 is purely technical. I believe that it answers the second of the issues raised by my hon. Friend the Member for Gillingham. Clause 27(2)(b) overrides the terms of part IV, which puts in place a system of economic regulation of airports which have a turnover of more than £1 million a year. It provides for the CAA to administer that system. It has always been our intention that paragraph (b) should override part IV. The amendment, which is purely technical, is designed to make that clear.
My hon. Friend the Member for South Hams mentioned amendments Nos. 23, 24 and 25. He would wish to introduce the affirmative resolution procedure in cases where the Secretary of State considers it necessary to use the powers of direction. We consider that that would be inappropriate, and, in certain limited circumstances involving national security, positively dangerous. If in the long summer recess an emergency arose—such circumstances would be limited—and it became necessary to issue directions for reasons of national security, it might be necessary to act very quickly. Therefore, we feel that it would be inappropriate to require the affirmative resolution procedure to be employed.

Mr. Steen: I think that my hon. Friend may have been briefed wrongly on this issue. It would be possible to act under the Civil Aviation Act 1982 if national security were involved. I am concerned about circumstances in which issues other than national security are involved. Particular and general directions should be brought to the House so that they can be debated. I wish to restrict the power of the


Secretary of State to do whatever he likes without submitting the matter to the House, other than when national security is involved.

Mr. Spicer: My hon. Friend makes his point, but I am advised that the effect of the amendment would be as I have described. On that basis, I hope that he will not pursue his amendment and that the House will accept Government amendment No. 22.

Amendment negatived.

Amendment made: No. 22, in page 19, line 43, at end insert
'; and it is hereby declared that nothing in Part IV of this Act is to be construed as prejudicing the generality of subsection (2)(b).—[Mr. Michael Spicer.]

Clause 28

TRAFFIC DISTRIBUTION RULES

Mr. Steen: I beg to move amendment No. 26, in page 20, line 35, leave out 'appropriate' and insert 'necessary'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments:

No. 27, in page 20, line 35, at end insert
'in order to satisfy the demand in the near future for the use of one or more of those airports, having regard to the efficiency, economy and safety of civil aviation.'.
Government amendment No. 28.
No. 76, in page 20, line 39, at end insert
'taking into account the advice provided by the CAA'.
Government amendment No. 29.
No. 30, in page 21, line 2, leave out paragraph (a).
No. 31, in page 21, line 6, leave out from 'traffic' to the end of line 7 and insert
'to, from or within countries or territories specified in the rules, but shall not discriminate among aircraft or operators of aircraft, or among classes of aircraft or of operators of aircraft.'.
Government amendment No. 32.
No. 47, in clause 30, page 23, line 41, leave out paragraphs (b) and (c) and insert—
'(4A) A scheme under this section shall not discriminate among aircraft or operators of aircraft or among classes of aircraft or of operators of aircraft.'.

Mr. Steen: It is unfortunate that these important amendments to critical clauses should be debated at 1.15 am. I am delighted to see so many of my hon. Friends here, but it is regrettable that there are present only two Labour Members and no members of the Liberal and Social Democratic parties. Debate on these critical clauses occupied a great deal of time in Standing Committee.
Amendments Nos. 26 and 27 relate to clause 28. They propose to reduce the powers of the Secretary of State. The Bill gives the Secretary of State enormous powers to do any number of things in relation to airports and the aviation industry. These amendments, taken together, are directed to avoiding the making of unnecessary traffic distribution rules. Under the Bill, as it stands, the Secretary of State can make rules whenever he considers it appropriate to do so. That gives him total discretion without having to find any criteria for the exercise. I do not know whether my hon. Friends realise how enormous his powers are. In theory, if the clause goes through unamended, he will be able to move any airline from any airport in any part of Britain. He can direct that an airline route should be changed. He can direct that an airline should move to any airport and do anything he chooses. It may be said that the

Minister would never do such a thing. However, that is what he would have power to do if the amendments are not approved.
The amendments require my right hon. Friend to satisfy himself that the proposed rules are necessary for meeting the demand for facilities at one or more of the airports serving the same area of the United Kingdom when the airport is, or is likely to be, overloaded beyond capacity. In satisfying himself, the Secretary of State will be required to have regard to the efficiency, economy and safety of civil aviation, which includes the needs of air traffic control.
The amendment seeks to provide some objective criteria which the Secretary of State would have to consider before he exercised his enormous powers. I think that the Secretary of State will agree that they are sensible criteria of efficiency, economy and safety, whereas at the moment there is no limitation on his powers.
The airline industry as a whole—that is, most of our British carriers—is very troubled about what clause 28 could enable the Secretary of State to do. The amendment, as drafted, would stop him moving airlines around without any reason for doing so. It provides that if there is still room at an airport he cannot move them. He would be able to move them only when more than one airport in the same area was overloaded.
Perhaps in that context one should deal with some of the smaller independent airlines—not just the scheduled airlines, but charter airlines. I should declare that I am advising one of the small charter airlines, British Island Airways, which is concerned about the possibility of being moved, lock, stock and barrel, out of Gatwick. The airline says that there is nothing to stop that now that CAP 517 has been produced. It is remarkable that it was produced just before the Report stage. It gives an insight into what the Civil Aviation Authority has in mind.
The CAA has in mind some schedule airlines, including the Brymon service from Plymouth to Heathrow. Part of the runway is in my constituency—it depends which way one lands and what the wind is like. Part of the airport at Plymouth abuts on my constituency. The Brymon flight from Plymouth, and Newquay to Heathrow would be affected. The CAA is clearly on the move, and the Minister needs the powers to move airlines from Heathrow to Gatwick. Once he does that, he will displace airlines from Gatwick, and they will come to Stansted.
I mentioned British Island Airways because it is the fifth largest carrier into Gatwick. It had the great privilege of flying the Prime Minister at the general election. It is one of the great success stories. It, along with other charter airlines, fears that it will be moved into Stansted. Clause 28 would give the Secretary of State just the powers that he needs. It allows him to do the very things that he needs to do—to allow CAP 517 to take effect.
Clause 28 gives the Minister great powers. Amendments Nos. 30 and 31 would restrict his power, in making traffic distribution rules, to discriminate between different classes of air traffic, by limiting that to discrimination between the destinations to which the aircraft may fly from the airport to which the rules apply. But the discrimination must be on a country by country basis—for example, all destinations in Spain, Scotland or the United Kingdom, or any other country or territory specified in the rules. The Secretary of State would no longer be able to discriminate between one airline and another, as he could under the Bill.
It is a pity that this is not realised. In theory, under clause 28, without amendment, the Minister could direct any aeroplane to go anywhere, whereas under the amendment he must discriminate fairly, on a country by country basis. For example, he could say that all 'planes flying to Spain out of Heathrow would be moved to Gatwick. He could not simply say that Iberia should be moved to Gatwick. Similarly, he could not move British Midland from Heathrow to Glasgow; he would have to move the British Airways shuttle as well. He could not discriminate against one airline, as CAP 517 has done, by moving the Dundee service. He could not do that if the amendment was carried.
Under the Bill as drafted, the Secretary of State can do anything he wishes. He need have no regard to different types of aircraft.He need have no regard to whether the aircraft are on scheduled or non-scheduled flights, public transport or private flights. There is a feeling in the airline industry that here again the Minister has enormous powers. In fact, he could run the whole aviation industry. He could direct everybody to do whatever he felt like doing. Of course, the present Secretary of State may not wish to do that, but he is taking reserve powers for the future. Many hon. Members believe that my right hon. Friend is giving to himself powers which are not needed. He must justify to the House why he needs such enormous reserve powers.
The Secretary of State can give directions that any aircraft should fly from anywhere to anywhere or move anywhere. Under the amendments my right hon. Friend must have regard to various factors. For example, he may say that all domestic feeder services must move from one airport to another. He may invent a class of aircraft and say that they must move. He may say that airlines with names beginning with the letter B should be moved or that captains who do not have yellow parrots on their shoulders when they take off should be moved. There are no limitations on the powers of the Secretary of State.
Apart from the Bill there are existing powers for the Secretary of State to regulate these matters, but only on a case to case basis. With regard to foreign aircraft my right hon. Friend can achieve the same result by refusing or imposing conditions upon the permit which is required by such aircraft to entitle them to carry passengers or cargo abroad, to or from the United Kingdom. The rule-making powers on British aircraft would be circumvented, to some degree, through existing air transport licensing procedures, which confer on aircraft operators the right to a hearing by the CAA and the right of appeal to the Secretary of State.
We are trying to provide an objective test in these amendments. As the Bill stands, there is no objective test. Clauses 28, 29 and 30 give the Secretary of State such power that he could distort the market forces of the airline industry and the airports. That could have a debilitating and devastating effect upon the course of the airline industry.

Mr. Bill Walker: My hon. Friend the Member for South Hams (Mr. Steen) has clearly spelt out the concern that is felt on the Conservative Benches with regard to the powers in clause 28. I wish to make my own position clear.
I favour a situation where the Secretary of State is the final arbiter. It is his responsibility to resolve matters. I

have always felt that it should be Parliament's right to get at any Secretary of State. That is what lay behind my amendments relating to air navigation orders and other matters of that nature.
In the previous debate the Minister gave the usual Front Bench reaction to the House being given the opportunity to pray against orders. That is the great failing today. Too often we bring in legislation which effectively goes through on the nod, and the House cannot do anything about it. That is where the weakness lies in the powers that the Government are taking. Parliament is no longer able to act as a check and balance. That is the true function of Parliament. It is the means by which the electorate can get at Ministers and get things done or changed.
Amendment No. 26, to leave out "appropriate" and insert "necessary", is sensible. One ought not to have things which are considered to be appropriate. That is not good enough. What does it mean? When something is necessary, it is clear that there is no alternative and that something must be done.
1.30 am
It is important that the advice of the CAA should be heeded. I say that knowing full well that the CAA has put out a consultative document which effectively would remove Dundee flights from entry into Heathrow airport. I have explained to the people running that airline that it was not the intention of that document to bring that into being immediately, if ever. I underline that because it may never happen.
I have faith in the democratic parliamentary system. Where it is allowed to operate, it provides the necessary checks and balances. The important and missing ingredient is that which allows the House to pray against any decisions which are effectively fundamental to what is happening. It is fundamental to move any class of aircraft or carrier from one airport to another. One can imagine the situation in Scotland—although I realise that the problem will probably arise in the London network initially—and the difficulty one would have of explaining it to people in the east and west of Scotland. Anyone who understands the politics of Scotland will know that those regions are quite different. If an individual were faced with that it would be difficult. It is like making a choice between Hearts and Celtic or Hibernian and Rangers.
If the orders or any decisions affecting them were to come before the House in a manner in which the House could pray against them, that would make all the powers that are being requested so much more acceptable to Parliament, because at the end of the day that is what the public is looking for. The House of Commons should be able to reach Ministers and change things which the House believes is wrong.

Mr. Robert Hughes: I intervene simply to ask the hon. Gentleman what has brought about his blinding conversion to parliamentary control after what he said in Committee? I do not recall him voting in Committee for Opposition amendments which sought to secure precisely that all the various orders should be subject to parliamentary scrutiny.

Mr. Walker: The hon. Gentleman's memory is not good. I have all the records here. I ask the hon. Gentleman to look carefully at what I said in Committee, and indeed at what I have said about air navigation orders. The whole of the airline industry is affected by air navigation orders


and the House has no means of praying against them. I have a six-and-a-half year record of speaking on that subject. I have had Adjournment debates and I have voted on more than one occasion. I hope that the hon. Gentleman will withdraw the suggestion that somehow I am changing course. I have been consistent from the beginning on how the House should deal with matters as fundamental as air navigation orders, which cover most of the areas where decisions are taken on the movement and positioning of aircraft and what can be done with aircraft. That is what is missing throughout the Bill, and it is missing from clause 28.
The amendments owe their origins to the fact not that the House is against the Secretary of State—any Secretary of State—making the final decisions, because it is right that he should be the final arbiter, but that the Secretary of State, whoever he is, should be accountable to Parliament.

Mr. Steen: That is the gist of all the amendments. The Bill gives the Secretary of State complete freedom and discretion with no criteria against which we can judge him. He can do whatever he likes. For the Government to give such powers to a centralised adminstration seems to conflict with their policies of decentralisation, deregulation and of laying down criteria to judge their performance. Does my hon. Friend agree that we are entirely behind the Bill and 100 per cent. in support of what the Minister is trying to do, but that we are not in favour of giving unfettered powers at the centre?

Mr. Walker: Yes. That sums up the mood on both the Opposition and the Government Benches. There is a recognition that if at sometime our airports should become completely clogged—if there were no scope to land more aircraft on the runways, nowhere to park on the tarmac, no access to gates and so on—and the system in operation could not resolve that situation, it would still have to be resolved. I understand that and believe that in the final analysis the Secretary of State is the right person to take decisions in such circumstances. I also believe, however, that no Secretary of State, regardless of his political colour, should be allowed to take such decisions without first referring to the House of Commons. I think that all Back Benchers would agree that we want to be the check and balance, so that there shall never be any suggestion that the decision has been a political rather than a proper democratic one.

Mr. Gerald Howarth: I support the amendment in the name of my hon. Friend the Member for South Hams (Mr. Steen), and I support what my hon. Friend the Member for Tayside, North (Mr. Walker) has said. The powers to be taken by the Secretary of State are very extensive. I think that they derive substantially from the principle behind the Bill, which I continue to find difficult to swallow. The London airports are beng proposed as a system and, consequently, extensive powers of traffic distribution are being taken. If each airport was able to appeal to the market, my right hon. Friend would not have to take these powers.
Under new clause 6 we discussed the question of the scheduling committees. These committees have very substantially resolved the problem of traffic distribution. They have made sure that the carriers have been able to satisfy their demands. As airports have begun to fill up that task has become more difficult, but each carrier is aware

of the increasing risk that it will not get its desired slots, and decisions will have to be made about how best to cope with that situation when it arises. Various options are open to the carriers. These include the acceptance of suboptimal timings, the rearrrangement of the historic and sup-optimal timings offered to achieve a satisfactory compromise, the acceptance of more optimal slots at an alternative airport and the use of greater capacity aircraft.
When faced with such problems, the carriers prefer to order their own destinies by making their own decisions. Government interference is resented. It is regarded as a paradox that the Government should be advocating the deregulation of air transport—and my hon. Friend the Under-Secretary of State is the most vigorous advocate in the Government of the deregulation of air transport—while at the same time, in order to facilitate deregulation, seeking to introduce a raft of new regulations which could be punitive for some carriers.
The Government argue that they need the powers principally because Heathrow and Gatwick are becoming saturated, but the fact is that, thanks to the activities of the scheduling committees, these airports are not yet saturated. If Heathrow, for example, were to become saturated, the owners of Heathrow plc might wish to consider seeking planning permission to build a STOL runway north of the airport, which could then handle the smaller aircraft, mentioned by my hon. Friend the Member for South Hams. That might well happen if Heathrow plc were operated by a completely separate company from that operating Stansted. But of course that will not happen, because there will be no incentive for the operators of Heathrow plc to seek planning permission for a STOL runway to increase their capacity to meet increasing demand at that airport. They will happily be able to rely on the powers given to the Secretary of State by the Bill and he will direct the traffic to we know where—to Stansted.
I am sorry to detain my right hon. and hon. Friends at this late hour, but this clause is critical. It is central to the Government's case, and it is central to our case as to why the Government have not got the Bill as right as we would have wished. If the Government are in any doubt about why these amendments are necessary, they have only to look at what happened when they sought these powers, and used them, in respect of the Iberian operation. It was said at the time that Heathrow was already full. We all know that it was not full. The operators knew that it was not full, but the politicians said that it was full. What did they do? They said that all the Iberian routes would have to shift to Gatwick. Naturally, Iberia said, "Stuff that," or words to that effect in Spanish, "we are not going to have any of that." It is late, Mr. Deputy Speaker, and I think that one is entitled to use slightly freer language than one might at a normal hour of the day. The Spanish refused to wear that.
My right hon. Friend and his colleagues will be faced with endless rows with foreign carriers over where the traffic is to go. If these matters were left to the market, as they properly should be, and if each individual airport could plan for itself, could use every ounce of ingenuity to expand capacity rather than rely on the intervention of politicians, things would be a lot better.
I feel very strongly about this and I should like to go on for longer, but I do not want to keep my hon. Friends from their beds. I believe these powers to be draconian. In hands less sure than those of my right hon. Friend they


could be used to do great damage to the British civil aviation industry. The amendments at least protect the industry from an over-zealous future Secretary of State.

Mr. Michael Spicer: I have to tell my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) that it is not bedtime yet. We have a lot more to do.
Could I say, particularly to my hon. Friend the Member for South Hams (Mr. Steen), that we recognise that some concern was expressed both in Committee and on its margins about this clause? It may be partly the fault of the drafting that the clause is unclear. I think that I heard my hon. Friend correctly when he said that under the powers of this clause the Secretary of State could move an airline to any airport—or words to that effect. That is manifestly not the case. Or, at least, it may not be manifestly not the case, but it is certainly not the intention. That is why one of the best ways of addressing the problem will be to discuss Government amendments aimed at remedying this lack of clarity, and I will come to them in a moment.
When my hon. Friend the Member for South Hams and I were looking at this clause together on an earlier occasion, he pointed out that under 28(1)(b), lines 35–38, the key words appeared to be "distributed between those airports". That matter concerned him and other colleagues in Committee. It was argued, fairly, that because of the way the clause was written the powers could be interpreted as being wide. The relevant part of the clause is subsection (3) which says:
Traffic distribution rules may—

(a) specify classes or descriptions of air traffic that are permitted under the rules to use any of the airports concerned;
(b) impose prohibitions or restrictions in relation to the use of any of those airports by air traffic of any class or description specified in the rules."

We accept that there may have been a lack of clarity in the drafting.

Mr. Robert Hughes: I do not think there is any lack of clarity in the drafting of the clause. Subsection (1) says that the Secretary of State
may make rules (to be known as traffic distribution rules) providing for air traffic, or any class or description of air traffic, to be distributed between those airports in such manner as he thinks fit.
That is absolutely clear. There is no doubt about it. There are no qualifications. Whatever else the clause may say, everything is governed by the fact that the Secretary of State may make regulations as he thinks fit. I welcome those words which I shall find useful as a future Secretary of State.

Mr. Spicer: The hon. Gentleman may be disappointed. I was about to say that we intend to clip his wings, but in this context he will never have any wings. If by a ghastly mischance he crossed the Floor of the House and, in recognition of that, became Secretary of State for Transport he would not have such power if the House accepts amendments Nos. 28, 29 and 32. They will make it clear that an airport operator cannot be forced to use a particular airport.
Amendments Nos. 28 and 29 make it clear that limitations will be placed on traffic distribution rules. Subsection (3) is already clear on that but we are tying it

up. A traffic distribution rule can do any one of three things: it can permit the use of an airport; it can prohibit the use of an airport; and it can restrict the use of an airport. A traffic distribution rule cannot force any aircraft operator to use a particular airport against his will, so it cannot direct an operator to a particular airport.

Mr. Steen: Although the discussion is taking place at 1.48 am on Thursday, this is a critical matter. It is important that we understand exactly the impact of the Government amendments. As things stand, the Secretary of State can cause an airline, whether its services are scheduled or non-scheduled, and whether it is public or private, to go somewhere. He is now saying that as a result of the Government amendments, he cannot tell it to go somewhere but that it can go anywhere else. Many of us do not think that Heathrow will ever become full, but let us suppose that that happens within the next five years. In that event what is my hon. Friend saying that the Secretary of State can or will do?
What these amendments try to do is help him by giving him some criteria by which he can discriminate between one airline and another, but saying that he has to do it in destinations. What does he think will happen when Heathrow or Gatwick is full? Will he say that a certain airline flying into Heathrow—and a very good one—cannot fly there any more?

Mr. Spicer: My hon. Friend asks me to tell him what our distribution rules, if any, will be. I am not in a positiion to do that because we have not yet gone through the full procedure, as he knows. The CAA is currently discussing the recommendations that have come out and having further consultations. What I can tell him about—or remind him of, since he is very knowledgeable in this connection—are the policy objectives we have set for CAA in the work that it is undertaking, the results of which it will produce to the Secretary of State. As my hon. Friend says, these are important amendments and I very much hope that the Government amendments will respond to the broad thrust of what he is trying to achieve.
Our policy objectives are these. First, to make efficient use of existing and planned airport facilities and available air space; secondly to enable air services to be operated where they best meet the needs of the travelling public; thirdly, to support the objective of increasing competition between airlines in the interests of the users; fourthly, to ensure satisfactory access to Heathrow and Gatwick for domestic services—and we debated that issue at some length earlier; fifthly, to maintain London's position as a major international centre and, within that, to maintain Heathrow as London's main scheduled service airport, while continuing to develop Gatwick as an effective second hub; and, most important in terms of the debates that have taken place and the objectives of many of my hon. Friends, sixthly, to avoid undue dislocation of the airlines using London's airports.
That is a comprehensive list, and the CAA, of course, has pointed out that it is a very difficult one to live with, because it is wide-ranging and very specific. It perhaps answers my hon. Friend's question about the Government's policies and intentions with regard to traffic distribution rules. What I cannot tell him at this moment, for the reasons I have given, is the precise nature of those rules. I can tell him that the Government will take a minimalist approach—if that is the right word. We shall


try to develop the system from where it is today as sensibly and gradually as possible. We realise of course that there is much debate to come as to when airports reach capacity, but I am sure my hon. Friend will not want to go over that again at this time of night.
Perhaps I ought to say to my hon. Friend the Member for Tayside, North (Mr. Walker) that I have not really discussed the question of parliamentary scrutiny and there are no amendments tabled on that, but he makes his point—

Mr. Bill Walker: There were amendments down but they were not selected.

Mr. Spicer: I was working from the amendments that have been selected, but perhaps that is not the way that I should have been doing it.
On the basis of the Government amendments, which I would recommend to the House, and of the objectives that I have given to the House, I hope that we have cleared up the quite understandable misconception that has existed about this clause and that we have satisfied my hon. Friends to the point that they will be able to withdraw their amendments.

Amendment negatived.

Amendments made: No. 28, in clause 28, page 20, line 36, after 'may' insert 'in accordance with this section'.
No. 29, in page 21, line 1, at end insert
'do any of the following things (and no more), namely'.
No. 32, in page 21, line 7, at end insert—
(c) provide for the rules to come into operation (in whole, or in part) at such time or in such circumstances as may be specified in the rules.'.—[Mr. Ridley.]

Clause 29

POWER TO LIMIT AIRCRAFT MOVEMENTS IN CERTAIN AIRPORTS

Mr. Michael Spicer: I beg to move amendment No. 33, in page 21, line 37, leave out from 'applies' to ', make' in line 40.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 35.

Mr. Spicer: The Standing Committee decision to accept amendment No. 48 and take it into the body of clause 29 means that the ATM power we seek would be extremely difficult to exercise at any airport, including Stansted. Hon. Members did not appreciate the main thrust of what was involved. What amendment No. 48 did was restrict the operation of ATM limits to that class of airport at which a limit would, in the judgment of the Secretary of State, following consultation with the CAA, result in a significant and perceptible control of aircraft noise nuisance which would be noticed by people living near the airport.
This test would be unlikely to be made at Stansted, at least for the time being, while current usage at the airport is well below the proposed limit. The purpose of the ATM limit is to facilitate the controlled expansion at a developing airport in such a way as to avoid the local infrastructure becoming overused. Certainly it enables Parliament to take a view about that development. Amendment No. 48, which was carried by the Committee, provided for exactly the opposite. In other words, it provided for the uncontrolled expansion of an airport, irrespective of any local impact. Thus, amendment No. 33

is designed to reverse amendment No. 48, and to restore the effectiveness of the clause so that an ATM can be set where appropriate. There has been some confusion in Committee about this situation, and I hope that amendment No. 33 will therefore be accepted.
I now turn to amendment No. 35. The Committee had before it amendment No. 49, which aimed to target the ATM limit powers specifically at those developing areas that had terminal expansion in progress. Hon. Members would have had certain thoughts in mind when they took a view about that amendment. We have some sympathy with the intentions that lay behind the amendment. My hon. Friend the Member for Tayside, North (Mr. Walker) clearly had in mind the restriction of clause 29 to those airports where there was the general prospect of development, to the exclusion of those airports already fully utilised, if not congested. I commend amendment No. 35 to the House. It is designed to achieve much the same result as the amendment No. 49 which appeared before the Committee. Amendment No. 35 restricts the application of clause 29 to airports at which the capacity of the existing runway or runways is not fully used for a substantial proportion of the operating day. The power to set an ATM limit will be restricted only to the airports where there is a genuine prospect of development because runway capacity is underused.
Amendments Nos. 36 and 42 would do much the same, but our draftsmen think that amendment No. 35 is the more appropriate method.

2 am

Mr. Bill Walker: I welcome the amendments. They are a big improvement on my amendment which the Committee accepted.

Mr. Steen: The amendments are a step in the right direction, but the Secretary of State still has enormous powers. Amendment No. 35 speaks of runway capacity that is not fully utilised for a "substantial proportion" of time. Does not the House recall the complications in Committee about this? What is a "substantial proportion" of time? Will there be endless appeals to the Secretary of State. Will not the present arrangements break down?
The Secretary of State will be involved in many decisions. Has he considered the manpower implications? How many extra officials will he need to administer the Bill? More and more airlines are to be allowed to ask him for his intervention. Has he estimated how many extra staff will be needed? The Bill gives him ever greater powers in the running of airports, air transport movements and where airlines fly to and from. Can my hon. Friend give some idea of the number of staff who will be required to deal with these matters?

Mr. Michael Spicer: No, because we do not envisage many airports being involved.

Amendment agreed to.

Amendment made: No. 35, in page 22, line 5, leave out from 'to' to end of line 8 and insert
'an airport if it appears to the Secretary of State that the existing runway capacity of the airport is not fully utilised for a substantial proportion of the time during which its runway or runways is or are available for the take-off or landing of aircraft'.—[Mr. Archie Hamilton.]

Mr. Steen: I beg to move amendment No. 37, in page 22, line 40, leave out 'such of'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following:

Government amendments Nos. 38 and 39.
Amendment No. 41, in page 22, leave out line 44.
Government amendment No. 81.

Mr. Steen: Towards the end of a marathon, one tends to repeat oneself. I hope that I shall be guilty not of tedious repetition, but of just a little repetition.
Amendments Nos. 37 and 41 relate to the power of the Secretary of State in clause 29 to make an order to limit the movements of aircraft at certain airports.
All the amendments deal with the powers of the Secretary of State. Clause 29 specifically deals with his powers to limit movements. The House has heard an outcry from my hon. Friends who believe that the Secretary of State has draconian powers. His powers are so enormous, wide and ill-defined and give him such discretion that they allow him to do anything, anywhere at any time. There are almost no criteria whereby we can judge what he will or will not do. The amendments seek to limit those powers. Amendment No. 41 does that in a specific manner and the other amendments do it in other ways.
Amendment No. 41 requires the Secretary of State to consult operators of aircraft which appear to be likely to be affected by the order as well as the organisations representing operators of aircraft. The Secretary of State would no longer have the discretion that he has under the Bill not to consult operators and organisations of operators on the ground that he did not think it appropriate to consult them. There is no limit to what the Secretary of State can do, and the amendment seeks to provide some criteria for what he should do.
The Secretary of State should consult operators. At present there is no obligation or onus in the Bill on him to do anything at all. This is the cri de coeur that has been heard from Conservative Benches and I hope that in the years to come it will not be so inappropriate that the Government should proceed to give the Secretary of State more powers over the movement of aircraft and the aircraft industry.
Will my right hon. Friend tell us why he will not accept this amendment under which he would at least consult the operators of aircraft? At present there is no reason why he should consult the operators. He should give an undertaking to the House that he will consult operators of aircraft who appear to be likely to be affected. If he is preparing all these sections of the Bill for a situation which will never exist, why is he doing this now? Why does he not wait five or 10 years until the situation arises?

Mr. Ancram: I believe that my hon. Friend the Member for South Hams (Mr. Steen) is still labouring under the effects of the previous amendments, and I am sorry that he did not recognise that within the grouping of these amendments there are Government amendments which respond to proposals which were made in Committee. My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) moved an amendment in Standing Committee which sought to add local authority interests to the list of organisations which must be consulted before an ATM limit order is made. The Government accepted the principle which underlay that amendment and undertook to return to the matter on Report with appropriately drafted amendments. Amendments Nos. 38, 39 and 81 fulfil that commitment.
We see the use of an ATM limit very much as an instrument for controlling the expansion of use of a developing airport. Part of the function of an ATM limit will be to ensure that the increasing use of an airport does not overstretch the capacity of local infrastructure, the planning responsibility for which falls to local authorities. It therefore makes good sense to provide for consultation with local planning authorities which are likely to be affected by operations at the airport on the particular issues raised by the application of an ATM limit.
I hope that my hon. Friend the Member for South Hams will agree that the Government amendments achieve the objectives which my hon. Friend the Member for Saffron Walden mentioned in Committee. My hon. Friend seems to think that there will be no consultation. I stress that the local authorities affected will be included in the consultation procedure that is provided for in clause 29(6).
If the Government amendments are accepted, as I hope they will be, clause 29 will provide for obligatory consultation with the CAA and the airport operator affected, and for discretionary consultation with a variety of aircraft operator interests, including those operators who seem likely to be affected and appropriate organisations representing operators of aircraft. Of course, local authorities would come in that category.
My hon. Friend's amendments seek to create a much more rigid consultation procedure than clause 29 envisages. They would compel consultation, not only with the CAA and the aircraft operator affected, but with operators of aircraft who are likely to be affected and organisations representing operators of aircraft. That would severely restrict the latitude which the Government would have in selecting, for instance, the aircraft operator organisations that should be consulted. There must be some latitude. Some aircraft operator organisations would, inevitably, be closely interested; by the same token, other organisations might have no interest in some cases. But the amendments would compel consultation regardless of whether those organisations had an interest in the matter. Earlier, my hon. Friend expressed concern about the burdens on staff in the Department of Transport, but his amendments would be burdensome, costly and wasteful.
Those are the reasons why I cannot accept my hon. Friend's amendments. I hope that he appreciates the Government's genuine intention to consult. As my hon. Friend the Under-Secretary of State said earlier, many clauses would require the Government to seek an affirmative resolution of both Houses of Parliament, so hon. Members would have a chance to declare their interests in the matter. I hope that the Government amendments will be accepted, and I ask my hon. Friend to withdraw his amendment.

Sir Humphrey Atkins: The speech of my hon. Friend the Under-Secretary of State for Scotland showed that, although the Government will be obliged to consult several people and bodies, they will not be obliged to consult the local authorities. Why should that be at the Secretary of State's discretion? I understand my hon. Friend's arguments so far, but why does he wish to relieve the Government of the obligation to consult the local authorities, which are closely involved in such matters and wish to be consulted? The Government amendments would give the Secretary of State discretion to consult the local authorities. Would it not be better if he was obliged to do so?

Mr. Ancram: There must be an element of discretion in this area, because my right hon. Friend the Secretary of State should consult only local authorities that are likely to be affected. The extent to which they are likely to be affected should also be taken into account. The Government amendments, which respond to an amendment tabled by my hon. Friend the Member for Saffron Walden, will mean that the local authorities which are likely to be affected are likely to be consulted. But if the Secretary of State was obliged to consult all local authorities, whether or not they had an interest in the matter, we should create unnecessary burdens and problems.
Clause 29(6)(a) contains a similar provision, in that operators of aircraft who appear to the Secretary of State to be likely to be affected may also be consulted. There is a double discretion because of the precise nature of the consultations and the interests of those organisations which must be taken into account. That is the pattern that we have followed, and I believe that we have fulfilled the undertakings that we gave in Committee.

Mr. Steen: With the leave of the House, may I ask the Minister to help hon. Members in this respect: does he believe that it is most unlikely that the powers contained in clause 29 will be used in the near future? If he can give an undertaking to that effect, of course, I shall seek to withdraw the amendment.

Mr. Ancram: In view of what my hon. Friend said in the debate on the previous set of amendments, I cannot give such an undertaking. But it would be unthinkable not to consult the organisations involved. I hope that that satisfies my hon. Friend's main points and that he will withdraw his amendment.

Amendment negatived.

Amendments made: No. 38, in page 22, line 42, leave out 'and'.
No. 39, in page 22, line 43, at end insert
'and
(c) any local authority or authorities who appear to the Secretary of State to be affected by operations at the airport,'.
No. 81, in page 23, line 1, leave out subsection (7) and insert—
'(7) In subsection (6) "local authority"—

(a) in relation to England, Wales and Scotland, has the meaning given by section 11(1);
(b) in relation to Northern Ireland, means a district council established under the Local Government Act (Northern Ireland) 1972.'.—[Mr. Ridley.]

Clause 30

SCHEMES FOR ALLOCATING CAPACITY AT AIRPORTS

Mr. Steen: I beg to move amendment No. 51, in page 24, line 20, at end insert—
'(7A) Compliance with the relevant provisions of the scheme shall be a condition of every licence granted under section 65 of the 1982 Act, and of every permission granted under an Air Navigation Order for aircraft registered in a country other than the United Kingdom to take up and set down passengers or cargo in the United Kingdom'.
The amendment would insert a new subsection to give teeth to the scheme that is provided for in clause 30 by making compliance with the scheme a statutory condition of the licences or permits required respectively by United Kingdom, foreign or Commonwealth aircraft for carriage

for reward to or from the United Kingdom. Noncompliance would become an offence punishable under existing law by a fine of £1,000 upon summary conviction and restrainable by injunction. Otherwise enforcement of the scheme would be left to the proprietor of the airport as owner of the land.
I think that there is a deficiency in the Bill, and I hope that the amendment will go some way to putting it right.

Mr. Bill Walker: I wish to draw the attention of the Chair to the fact that the amendment causes us to discuss air navigation orders. I was informed that amendment No. 69, which I tabled, could not be included in the selection list because of a technical drafting defect—in other words, it referred to air navigation orders. We have done little else but refer to air navigation orders for most of the evening, and the House has not had the opportunity to debate one of the most important principles of all, which is whether hon. Members should have the right to pray against an air navigation order. The House has not been given the opportunity to do that throughout its consideration of the Bill on the Floor of the House and in Committee. It has been deprived of an opportunity to deal with a fundamental—

Mr. Deputy Speaker: Order. The hon. Gentleman must not refer to an amendment that has not been selected. He must not criticise Mr. Speaker's selection.

Mr. Walker: I understand that, Mr. Deputy Speaker. I am sure that you will understand that when the Bill goes to another place their Lordships will read carefully what has been said in this place. I am sure that the point I have made will not be missed by them.

Mr. Ancram: I know that my hon. Friend the Member for South Hams (Mr. Steen) was seeking to be helpful in introducing the amendment and I am sorry that I shall have to ask him to withdraw it, which I have had to ask him to do in respect of other amendments.
I ask my hon. Friend to withdraw the amendment because compliance with slot allocation schemes is already vested under clause 30 in the airport operator. Subsection (7) sets out that where a scheme under clause 30 is in force
it shall be the duty of the airport operator to give effect to the scheme.
At an airport that is subject to a slot allocation scheme an aircraft operator will need the necessary air transport licence or an operating permit and he will need a slot. The amendment, which tries to combine these requirements, would cause confusion.
The amendment is unnecessary, and I ask my hon. Friend to withdraw it.

Amendment negatived.

Clause 33

INTERPRETATION OF PART IV

Mr. Bill Walker: I beg to move amendment No. 54, in page 26, line 3, at end insert
'"the airport operator" means either the sole provider of airport facilities for which airport charges may be levied under this Part, or the several providers of such facilities at such airports.'.
The amendment was linked to new clause 9, which we debated much earlier. As I was encouraged by what my right hon. Friend the Secretary of State said at the end of the debate on new clause 9, when he indicated that he


would be keen to see some other involvement other than moneys being put into other operations at the airport, it may be necessary, if that were to happen, for an amendment of this sort to be incorporated in the Bill to cover the providers of such facilities, who need not be the principal airport operators in future. It could be beneficial for that provision to be incorporated in the Bill.

Mr. Ridley: As my hon. Friend says, the direct point of the amendment fell when new clause 9 was not included in the Bill. If under a voluntary agreement independent terminal operators come into existence, I accept that they may have to have some basis for charging. However, they would come into existence only under an agreed scheme with the airport operator. Presumably it would be possible under that arrangement for the allocation of charges, the method of charging or the type of charges to be agreed. I hope that my hon. Friend will agree that it would be inappropriate to press this amendment at present.

Amendment negatived.

Mr. Michael Spicer: I beg to move amendment No. 55, in page 26, leave out lines 17 to 19.
Those hon. Members who were on the Standing Committee will remember that the line the amendment seeks to remove was successfully inserted by my hon. Friend the Member for Hayes and Harlington (Mr. Dicks). We feel that my hon. Friend's amendment is not the best way to extend more protection to concessionaires. I know that he now accepts, in turn, that we are disposed to accept that some further strengthening may be needed for concessionaires to ensure that, in particular, at five-yearly Monopolies and Mergers Commission reviews the MMC can take into account the legitimate interests of concessionaires as part of its consideration of where the public interest lies. For that purpose, we intend to put concessionaires on the same footing as users.
We have not been able to bring forward an amendment for Report, but the Government intend to bring forward a suitable amendment in another place, which I know pleases my hon. Friend the Member for Hayes and Harlington. I hope that, on the basis of what I have said, this amendment will be accepted.

Amendment agreed to.

Clause 34

AIRPORTS SUBJECT TO ECONOMIC REGULATION: REQUIREMENT FOR PERMISSION TO LEVY AIRPORT CHARGES

Amendment made: No. 57, in page 27, line 4, after 'force,', insert
'then (subject to section 49(2A))'.—[Mr. Michael Spicer.]

Clause 38

DISCRETIONARY CONDITIONS

Amendments made: No. 58, in page 34, line 5, after 'relate', insert
'or are, in the opinion of the CAA, artificially low'.
No. 59, in page 34, line 8, at end insert—
'(3A) In subsection (3)(c)(i) the reference to levels at which charges are fixed being artificially low is a reference to such levels being significantly lower than they would otherwise have been—


(a) by reason of any subsidy—

(i) furnished by any person or authority to the airport operator in connection with the business carried on by him at the airport, or
(ii) furnished to that business by the airport operator out of funds attributable to any other activities carried on by him,

whether by the making of loans on non-commercial terms or otherwise; or
(b) where the airport operator is a company, by reason of any conduct on the part of the company which, in the opinion of the CAA, has resulted, or will result, in—

(i) a failure by the company to achieve a reasonable return on the capital employed by it in the business carried on by it at the airport, or
(ii) a failure by the company to distribute to members of the company a reasonable proportion of the profits available for distribution, or
(iii) a failure by the company to reach a level of borrowing which is appropriate having regard to its equity share capital (within the meaning of the Companies Act 1985).

(3B) In determining for the purposes of subsection (3A) what is reasonable or (as the case may be) appropriate in the case of a company, the CAA—

(a) shall disregard the fact that the relevant conduct on the part of the company was in conformity with any policy for the time being of a person having control over the company, but
(b) shall have regard to any circumstances which, in the opinion of the CAA, would affect any company carrying on the business of operating the airport as a commercial undertaking.'.—[Mr. Michael Spicer.]

Clause 49

FUNCTIONS IN RELATION TO PERMISSIONS AND CONDITIONS INITIALLY EXERCISABLE BY SECRETARY OF STATE

Amendment made: No. 60, in page 48, line 8, at end insert—
'(2A) If the Secretary of State so determines at the time of granting a permission under this Part in respect of an airport in pursuance of this section, that airport shall, instead of becoming subject to economic regulation under this Part at the end of the period of six months referred to in subsection (1), become so subject on such earlier date as may be specified by the Secretary of State in his determination.'.—[Mr. Michael Spicer.]

Clause 67

CORPORATION TAX

Amendments made: No. 62, in page 63, line 42, leave out
'Income and Corportation Taxes Act 1970
and insert '1970 Act'.
No. 63, in page 64, line 12 at end insert—
'(5) Where in the case of a claim for group relief—

(a) the claimant company is the BAA or the successor company and the surrendering company is a company to whom property, rights or liabilities have been transferred by a scheme made under section 1, and
(b) the claim relates to the accounting period of the surrendering company first ending after that transfer, and
(c) the corresponding accounting period of the claimant company ends with the same date as that accounting period,

then, for the purposes of section 261(2) of the 1970 Act (corresponding accounting periods) as it applies in relation to the claim, those accounting periods shall be taken to coincide and, for the purposes of section 262(1) of the 1970 Act (companies joining or leaving group) as it so applies, the claimant company


and the surrendering company shall be taken to have been members of the same group throughout each of those periods (notwithstanding anything in section 262(2) and (3) of that Act).
(6) In this section "the 1970 Act" means the Income and Corporation Taxes Act 1970, and in subsection (5) above expressions used in sections 258 to 264 of that Act (group relief) have the same meanings as in those sections.'.—[Mr. Michael Spicer.]

Clause 69

ORDERS AND REGULATIONS

Amendment made: No. 64, in page 65, line 1, leave out 'An' and insert
'Any regulations under section (Compensation for loss or diminution of pension rights) or'.—[Mr. Michael Spicer.]

Clause 74

SHORT TITLE, COMMENCEMENT AND EXTENT

Amendments made: No. 65, in page 67, line 14, at end insert— 'section 67(5) and (6);'.

No. 66, in page 67, line 22, after '67', insert '(1) to (4)'.—[Mr. Michael Spicer.]

Schedule 1

APPLICATION OF ENACTMENTS RELATING TO STATUTORY UNDERTAKERS ETC

Amendments made: No. 67, in page 69, leave out lines 18 and 19.
No. 68, in page 69, line 21, at end insert
'and for the purposes of any other enactment in which "statutory undertakers" or "statutory undertaking" has the meaning assigned to it by section 275(1) of the Town and Country Planning (Scotland) Act 1972.'.—[Mr. Michael Spicer.]

Schedule 5

REPEALS

Amendment made: No. 70, in page 78, line 28, column 3, at end insert—
'In section 81(3), the words "section 44".'.—[Mr. Michael Spicer.]

Bill to be read the Third time this day.

Basildon Development Corporation

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Mr. David Amess: The fact that I am able confidently to make the statement that Basildon is not only the most sucessful new town in the United Kingdom but the most dynamic is largely due to the success and endeavours of the development corporation. On 31 March the development corporation was wound up, having been in existence since the year when I was born. Its passing was a significant moment for my constituents and constituency. It marked the end of Basildon being described, in any real sense, as a new town—we have come of age. My hon. Friend the Minister will recognise that I judge that to have happened just a little too quickly. I very much wanted the life and work of the development corporation to be extended a little longer, so that it could complete a number of important tasks.
As for the role of the corporation in the development of the town, I sometimes wonder how widely the extent to which the Government have encouraged or invested money through that body is appreciated or understood. Vast sums have been spent wisely to make Basildon what it is today—the finest town in the United Kingdom. I pay tribute to all the staff of the development corporation, its general manager, Mr. Douglas Galloway, and above all the chairman, Dame Elizabeth Coker. Those people have all worked tirelessly in their efforts to create a town of which we can all be proud, and they have certainly succeeded in that aim.
I would not support everything that the corporation has done. For instance, I can well appreciate the resentment felt in some quarters at the manner in which it has compulsorily purchased land or properties, and indeed about the design of some of the housing estates. Nevertheless, credits should be given for the many successful initiatives that the corporation has undertaken. Its task of attracting new business to the area has been one of the main contributing factors to the reduction of unemployment in Basildon over the past year—a reduction of 5·8 per cent.
Thanks to the Government and the corporation, my constituency has grown in stature as a strategic centre for business and industry. That point has ably been seized by Essex county council, which will be holding a substantial business and industry exhibition in Basildon on 14 April. The M25, the expansion of Stansted and the building of the Channel tunnel will all enhance the attractiveness of the town for trade and industry, as can be testified by visits recently from Department of Trade and Industry Ministers.
Thanks to rate capping and the Government's proposals to set business rates centrally, the damaging effects of the Socialist councils' high rating policies have been successfully counteracted. The development corporation has given active support to many local organisations and charities. Two projects which I know are grateful for the support given are the centre recently opened in Vange for the visually handicapped, and St. Luke's hospice for cancer patients. Both facilities meet important needs in the community, but they might not have got off the ground if it had not been for the encouragement and assistance given by the development corporation.
The jewel in the crown of the corporation must be the new shopping centre, the largest covered shopping centre in Europe, which I trust will enjoy an official opening later this year. There can be no rival facility in the United Kingdom to that of the East Gate mall in Basildon, which successfully heralds the concept of shopping in the 21st century. Merchandise of every conceivable description can be purchased within attractive and comfortable surroundings. This showpiece has given the ultimate dimension to the town's slogan, "Basildon means business."
The demise of the development corporation begs many questions in the minds of my constituents. They rightly ask: what next? They have been told that that which they have known for so long, the development corporation, has gone, and has been replaced by the Commission for the New Towns. They are anxious to know precisely what that means, particularly what the powers and responsibilities of the commission are. The 15,500 former corporation tenants are anxious to know what will happen to the management of their dwellings, whether programmes of repairs and improvements will continue, and whether there will be the same spirit of co-operation should they wish to purchase their property. It is well known that the Basildon development corporation was a pioneer in that area, achieving record sales. Further anxiety has been expressed that if agreement is eventually reached on the handing over of housing stock to the local authority, Socialist opposition—by which I mean the Labour party, the Social Democratic party and the Liberal party—might somehow frustrate people's plans to purchase their own property.
Constituents have asked what the future is for the tasks and projects started by the corporation, such as road systems, and whether it is the intention of the Commission for the New Towns to complete them. On Monday I had a meeting with the chairman of the commission and the chief executive, Sir Neil Shields and Mr. Woodhall. Because of our discussions, I am reassured that Basildon will go forward into a new and exciting future, and I trust that my hon. Friend the Minister will be able to confirm that when he replies to the debate.
There are specific anxieties which constituents have raised and which I wish to bring to the attention of the House. The first concerns a potentially serious problem which affects over 1,000 properties in the Vange area of Basildon.
I have been inundated with letters from the owners of Lindsay Parkinson High Speed System Build properties. There are approximately 600 houses and 200 flats. Over half of the properties have been purchased from the development corporation, but some from the local authority. As a result of people's homes developing defects and the difficulties they have encountered in trying to sell such properties, an action group has been formed. The problems with the properties are due to carbonation—porous concrete; spaling—the cracking and corrosion of concrete beams caused by rust in the metal strengthening rods; and calcium concrete, when calcium carbonate has been used as a drying agent in the construction of the beams.
Some of the letters I have received described cracks appearing in the properties. Others described the distressing cricumstances of being unable to sell and

prospective purchasers pulling out at the last moment because of the difficulty of obtaining support from building societies.
The action group has asked for help in a number of respects. It strongly urges for a clean bill of health for all the sound properties. To achieve that, tests will have to be a carried out on all the dwellings. The action group wants the Commission for the New Towns to buy back the properties which cannot be sold at the full market price. The group feels that the commission should seek funds from the Government to carry out essential repairs. It feels that the commission should indemnify the owners against future defects in construction and should seek ways to extend the life of the properties through the use, for example, of mastic sealing on the defective points.
The builders have gone into liquidation. Some of my constituents make the point that there was an irresponsible use of the chemical compound, calcium chloride, by the contractors who manufactured the components. The local authority contractor neglectfully accepted the components without a quality assurance certificate. The corporation's site representative should have seen such documents.
My constituents enthusiastically purchased their properties, taking full advantage of the right-to-buy legislation. Now that the problems with these properties have emerged, I have every confidence that the commission and the Government will act quickly to assist my constituents. I shall not rest until these matters have been dealt with satisfactorily.
The commission should also try to resolve the problems which have been highlighted by the Felmores Heating Action Group. Four weeks ago that group met my hon. Friend the Minister for Housing, Urban Affairs and Construction in Basildon. The group, which represents a considerable number of tenants, maintains that the district heating system provided for the Felmores estate is inefficient and expensive. Nearly a thousand tenants are served by this system. Some are in stressful circumstances—unemployed or single parents.
I have toured the estate and talked to many of the residents. I have seen countless heating bills which seem to be consistently high, especially when one bears in mind the size of the dwellings. The estate was designed in 1974 and built by ABK, based on the findings of Ore Arun and Partners, prompted by the 1973 energy crisis. The company studied the cost effectiveness of various energy saving measures in yardstick housing. The coal-fired district heating system is run for the corporation by Associated Heating Services. It provides domestic hot water as well as space heating, and it is in operation all the year.
Tenants pay a small standing charge, together with an amount based on their estimated consumption. There is a weekly charge throughout the year, which is paid with the rent. The heat meters are read annually, and rebates or supplementary bills are given. Integral meters calculate the kilowatt hours consumed from the flow rate and the temperature difference between incoming and outgoing water. Thermostats with time switches can be used by tenants to regulate the system. A realistic assessment of running costs for the Felmores average house is considered to be £250 per annum using an individual low thermal content, wall mounted, balanced flue boiler with programmer control for domestic hot water and space heating and thermostatic radiator valves. The average charge levied for heating the average house on the


Felmores estate with its district heating system is 56 per cent. higher than the cost of running an individually fitted gas boiler heating system in each dwelling.
I should add that similar problems are being experienced at the other end of Basildon in the Langdon Hills area. So I would ask that assistance be given immediately to relieve the distress of my constituents and that individual gas-fired central heating be provided. The case for that is overwhelming.
Recently, an action group has been formed of residents opposed to a bus link between the town centre through Ghyllgrove to Cranes Farm road and the industrial areas. I have received counties representations, both written and personnel, opposing the bus link. If the proposal were to go ahead there would be 26 buses per hour through the peak times. Residents feel that that would change a beautiful, safe, quiet residential area into a dangerous, noisy petrol or diesel-polluted highway. The bus link is also opposed by the governing body of the local school, Ghyllgrave, and by the Basildon industrial group. In fact, I am struggling to find anybody who supports the bus route. It is argued that there would be severe traffic congestion at the southern end of Ghyllgrove caused by buses as they give way to the main bus route in Whitmore Way. Particular concerns have been raised about increased dangers to schoolchildren, youngsters and pensioners crossing the roads. I very much hope that that project will not go ahead and that the alternative proposals of residents and the Basildon industrial group will be acted upon.
The final concern that I want to deal with tonight is that of residents in the Eversley area of Pitsea. They bought properties in a development promoted by the corporaion as a quiet residential area. One can well imagine their horror when they learnt of a proposal for a bus route to run right through the estate. Residents have been further alarmed by suggestions that the local Socialist authority intends further developments to surrounding areas. Those people ask only that they be left to enjoy the peace and tranquility which originally attracted them to that area.
The winding up of the developmet corporation and the arrival of the New Towns Commission is a critical moment for Basildon. There is a point in the life of a town when development has to stop. My constituents do not want the town to become over-developed and for the crowded conditions of London, from where many of them originally came, to be duplicated. I have every confidence that the New Towns Commission will act on my constituents' wishes to help improve the quality of life and respect our precious countryside.

The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): My hon. Friend the Member for Basildon (Mr. Amess) has been a strong advocate of Basildon new town and has always represented his constituents in a clear and forceful manner. Tonight has been no exception to the excellent service that he gives to his constituents. However, I am sure that my hon. Friend will be aware that a target date for the windup of the Basildon Development corporation has been publicly on the agenda since 1978, when a wind-up date of 31 December 1983 was announced. Since that time, wind-up has been postponed on two separate occasions, primarily to complete the land assembly programme and to achieve housing transfer, which was originally envisaged, as elsewhere, to the district council. I take on

board what my hon. Friend said, and hope that he will listen to a few remarks about that. The land assembly programme has been a complex and difficult task, and one that Basildon has now completed. To appreciate the achievement, I should like to take the House back to the situation that led to Basildon's designation as a new town.
The main purpose in designating Basildon new town was to provide housing and jobs and to relieve the housing problems in the aftermath of the second world war. This was in line with other new towns around London. However, Basildon has a secondary and very special task to achieve, arising from the unususal local history. As my hon. Friend will know better than I, as far back as 1901, land at Basildon had been divided into small plots and sold to Londoners at what was known as 'champagne sales." This usually meant that the potential buyers' judgment had been impaired by the generous hospitality of the commercial company selling the land. This process continued until the second world war. The land was not of good farming quality, and many farmers sold of their holdings piecemeal, in competition with estate companies. Unfortunately, no thought was given to future development by the land speculators, and consequently no roads or sewers were ever constructed.
Development was sporadic, with many plots remaining as untouched as they were when first purchased. In addition, much of the building was of a temporary nature or of a very poor standard. When Basildon new town was designated in 1949, the corporation was given the task of buying up all these plots in order to sort out this difficult legacy. The corporation embarked on this task in 1951, which involved the purchase of some 30,000 plots of land, many in unknown ownership. Only recently has the corporation completed the acquisition of all outstanding interests required for future development—a task that nobody foresaw would take quite as long as it did. During the 35 years that it has taken to assemble all the necessary land, Basildon's population has risen from 25,000 to 100,000. The recent completion of 37 sheltered dwellings for the elderly, at Felmore, brought to an end the corporation's direct involvement in house building. This has resulted in the construction of 24,839 houses, bungalows and flats, of which 10,000 have been sold to tenants.
The market for private housing for sale has always been strong in Basildon, and the development corporation has played a significant role in ensuring that a wide range of housing is on offer—from one-bedroom flats to five-bedroom houses. The corporation has placed particular emphasis on the availability of housing for young, first-time buyers, and for the elderly through sheltered housing schemes. The corporation has also given a lead to developers in the private housing sector, promoting the provision of good quality housing at all price levels, with high environmental standards. By entering into partnership arrangements, the expertise of many years has been applied, whereby the private builder is now prepared to build a wider range of homes.
My hon. Friend referred to housing transfer. I referred earlier to the transfer of corporation housing to the council and to the fact that in the past wind-up had been delayed to facilitate this. The traditional practice when new towns are wound up has certainly been to transfer rented housing stock to the relevant district council. Indeed, this course has always been followed in England, except in the case of central Lancashire where the housing passed to four


housing associations. But we do not want the district council option to be the only one considered in future, including at Basildon. My hon. Friend may have seen a written answer that I gave to my hon. Friend the Member for The Wrekin (Mr. Hawksley) just before Easter. I said that the Government are keen to see pursued the options of transfers to private sector trusts or housing associations. In this context, Thamesmead should be an incentive. The Commission for the New Towns, which has now taken responsibility for the development corporation's housing stock in Basildon, has the same powers as the corporation with regard to negotiating transfer arrangements, and I expect the commission to discuss with my officials how best to pursue the options. I am sure that my hon. Friend will find a ready ear in Sir Neil Shields, the chairman of the commission, in his future talks with him on this point.
The corporation's achievements at Basildon have not been limited to land assembly and housing provision. Some 850,000 sq m of factory space have been provided, along with 75,000 sq m of office space. This has resulted in the creation of new jobs in the office and service industry sectors. The corporation has played an important role in encouraging and assisting smaller starter firms. The institution funds, which have provided so much building capital in recent years, are often reluctant to accept starter firms as tenants, and the firms themselves often prefer to limit their outgoings on accommodation.
One way in which the corporation decided to meet these needs was by the conversion of an old vacant factory into small industrial units. This scheme, known as the Laindon enterprise centre, has been such a success that the remainder of the old factory has been converted to provide further units. Initiatives such as this have provided Basildon development corporation with a notable record for creating job opportunities.
The Commission for the New Towns has now inherited the task of continuing to promote the town and to attract investment, and it will see to completion the many schemes put in hand by the corporation and under construction, which will offer many more permanent jobs in the future.
My hon. Friend rightly mentioned that one of the most noticeable improvements in Basildon in recent years has been the changing face of the town centre. Retail and office developments, imaginative in design, have dominated the commercial scene in Basildon since the opening of a 15,000 sq m Savacentre store and associated shopping mall in 1980. This scheme, known as Phase 1, heralded a new era in the history of Basildon town centre. Phase 1 was designed, constructed and let by the development corporation, and it was the start of a process that planned to provide Basildon with the most advanced regional shopping centre complex in Essex.
Phase 2 commenced in 1981, in the Eastgate area of the town centre. This development, on a six-acre site, is right in the heart of the existing town centre, and was designed with flair and imagination to provide an airy and pleasant covered environment for shoppers. The development consists of a 19,000 sq m development store and 75 shop units. Two shopping levels have been linked to tiered galleries above, servicing four levels of car parking for approximately 1,000 vehicles. The whole scheme is one of the most advanced of its kind in the country, and

certainly has no comparison in the south-east. It is an outstanding memorial to the enterprise and innovation shown by the development corporation during its lifetime.
Further proposals by the corporation, which have recently received planning approval, involve the roofing-in of those areas of the old town centre that lie between Phase 1 and Phase 2, and extending this cover beyond Phase 2 to the existing town square. This scheme is exciting in its concept, and if a way can be found to allow it to proceed, it should provide the necessary boost to the older areas of the town centre, in order that they can effectively compete with the surrounding high-quality, environmentally controlled new developments.
My hon. Friend has rightly mentioned several points which are bothering his constituents. Perhaps I can now deal specifically with those points. First, he mentioned the Felmore district heating scheme. I understand the points that he made about the adequacy of this district heating system. I can tell him that my officials are currently appraising the financial implications of improving the existing system against a total replacement programme. A decision on this will be made as soon as possible.
My hon. Friend then turned to the Ghyllgrove busway. That was one of the corporation's last planning applications under section 7(1) of the New Towns Act 1981. It was for the construction of a bus-only link between Cranes Farm road and Ghyllgrove, which was, I understand, to permit the rationalisation of bus routes serving the industrial areas in the northern area of Basildon.
The application came rather late and, as my hon. Friend said, it attracted unanimous opposition from local residents. Many of the points raised required further investigation by the Department, but, as there was insufficient time to pursue the matter before the corporation was wound up, it was not possible to approve the application under the appropriate section of the New Towns Act 1981. It will be open to the commission to reopen the application, but, before deciding whether to do so, I am sure the commission will consider the points that have been raised by my hon. Friend and his constituents.
I note what my hon. Friend said about the development at Eversley, and in particular the proposed bus route through the area. The points that he has made will be considered carefully and, where necessary, will be referred to my colleagues in the Department of Transport.
My hon. Friend referred to the Vange area housing. My officials are examining that closely. We hope to come back with conclusions as soon as possible. We may have some hope for my hon. Friend on that.
The success of Basildon owes much to the time and effort given by the chairman and general manager of the development corporation. They have been successful in completing much worthwhile development and in combining the needs of the town with the requirements of the individual inhabitants. This may be recognised as a classic pattern of action-centred leadership. The corporation has shown that a dynamic town such as Basildon can only be developed from within by being sensitive to representations, market forces and the wishes of the people. I am sure, therefore, that my hon. Friend will join me in thanking Dame Elizabeth Coker and Mr. Galloway, the manager of the corporation, for their hard work. My hon. Friend has already mentioned that. On behalf of the Government, I thank those two hard-working people for the work they have done.
The assets and liabilities of Basildon development corporation have now been transferred to the Commission for the New Towns. The commission has set up a local committee to manage Basildon's rented housing stock. I hope my hon. Friend has noted the points that I have made about housing.
I am grateful to my hon. Friend for giving me the opportunity to put on record the appreciation of myself and

the Government for all that the development corporation has achieved. Within the next three months, before the corporation is dissolved, I hope to visit Basildon and to convey those thanks to the good people of my hon. Friend's town.

Question put and agreed to.

Adjourned accordingly at eight minutes to Three o'clock.